It's a sad fact that vehicle thefts have become so common nowadays. In addition, the process of making a theft claim can be a painful experience, with long processing time and the need to continue the loan repayments although the vehicle has been stolen. Nevertheless you can lessen the hassle of making a theft claim by understanding motor policies and their coverage in terms of theft protection offered as well as knowing some guidelines on how to make a theft claim.

Types of Motor Policies and Coverage
There are basically three types of motor policies namely Third Party Cover, Third Party Fire & Theft Cover and Comprehensive Cover.
Third Party Cover - indemnifies the Insured against legal liability arising from both bodily injury and property damage to third party. This plan excludes protection for accidental damage, theft or fire suffered by the insured's vehicle.

Third Party Fire & Theft Cover - provides cover as in "Third Party Cover", and also indemnifies the Insured in the event that the Insured's vehicle is stolen or damaged by fire.

Comprehensive Cover - provides covers as in "Third Party Fire & Theft Cover", plus physical damage to the Insured's vehicle following accidental collision or over-turning.

The theft protection offered in motor policies cover different circumstances in which vehicle theft can occur. In general, loss of vehicles due to accidental theft can be described as an incident in which a vehicle is unlawfully taken away from the insured party. If someone authorized by the vehicle owner uses the vehicle for a certain time and disappears with it, then it is not a straightforward theft claim. Such instances are excluded in a standard motor policy and hence the theft claim will most likely be rejected. Theft claims can also be rejected if the insurer or police suspect foul play or negligence on the part of the driver.
Note that theft claim will be settled based on the market value of the vehicle at the time of loss, or the Sum Insured, whichever is lower. As such, if the vehicle is under-insured, the settlement will be based on the Sum Insured, likewise if the vehicle is over-insured, the settlement will then depend on the prevailing Market Value.
Insurers do not compensate for loss of personal belongings such as cash or valuable items left in the vehicle. As such, vehicle owners must ensure that they do not leave their personal belongings in the vehicle.

Making a theft claim
The process of making a theft claim is almost similar to making an ordinary accident claim but making a theft claim usually requires longer processing time. The period given by Bank Negara Malaysia is stipulated to be processed within six months. However, in most cases, claims are settled as soon as the theft investigation is finalised without any irregularities being detected and all documents required for claims processing with payment have been processed.
In the event your vehicle is stolen/loss:

Report to the police within 24 hours as required by Law and obtain a copy of the police report.
Collect the claim form from your insurance company. Complete, sign accordingly and submit the claim form with supporting documents stated below.
- Original police report
- Original certificate of insurance
- Original vehicle registration card
- Copies of Identity card and driving license of the insured
- Copies of Identity card and driving license of the driver
- Copy of Hire purchase agreement (if any)
- Two sets of original vehicle keys
- Two copies of JPJ's Transfer Form K3 (transfer of vehicle ownership form to be completed by registered owner) and Lampiran A1 (letter of indemnity)
- Letter of release from the hire purchase company (if any)
- JPJ's Lampiran B duly signed and certified by a Commissioner for Oaths (for certification of owner's identity card)
Note: Some insurers may require additional or fewer supporting documents
Insurers are required to finalise a theft claim, either approve or reject it within six months from the date of submission or when the police closes the investigation file, whichever is earlier.
After a vehicle theft claim is submitted to the insurer, there are two possible outcomes, the police may recover the vehicle or the insurer may decide to settle the claim based on advice from the police.
If your vehicle is recovered by the police before the six-month time frame is up or prior to the settlement of the claim, you should channel the said recovery information to the insurance company for further advice on appropriate action. You will have options to either:-
Withdraw the claim (if the vehicle is recovered in good condition)
Withdraw the claim and undertake the repair at your own expense (if the vehicle sustained minor damage and you wish to retain your No Claim Discount (NCD) entitlement)
Withdraw the Theft Claim but pursue with Own Damage (OD) Claim (if vehicle recovered sustained extensive damage or has missing parts). If you pursue with OD, your NCD entitlement will be affected.
If the vehicle is not recovered by the police within six months from the date of the submitted theft claim, the insurer can settle the claim or reject it based on valid grounds. Generally, insurers would be able to decide whether the claim should be accepted or rejected by obtaining substantial information from the police investigations and adjuster findings. If the six months have passed and the insurer decides to reject the theft claim, it is required to inform you of it. You can then appeal to the insurer or refer the matter to the Financial Mediation Bureau.
Keep in mind that each insurer will have its own procedures governing the claims process. If you have any uncertainties on making a claim, contact your insurer for more details.
While insurance coverage for vehicle theft protect motorists with comprehensive policies, motorists should always be cautious and ensure that their vehicle is protected with vehicle alarm as well as gear and steering locks. Immobilisers or tracking system can also be installed for extra protection.