Bank Negara Malaysia (BNM) has introduced groundbreaking enhancements to the motor insurance claims process that will transform how Malaysian motorists experience accident claims and settlements. These changes promise to cut claim processing times dramatically whilst ensuring fairer treatment for all parties involved.

For millions of Malaysian vehicle owners, these improvements represent the most significant overhaul of motor insurance practices in recent years, addressing long-standing frustrations with lengthy delays, unclear processes, and inadequate communication from insurers.

Revolutionary Timeline Reductions for Motor Claims

The most significant advancement comes through drastically reduced processing timelines that will benefit every Malaysian motorist. BNM’s deputy director Lailatul Akma revealed that these changes aim to “cut the average time taken to settle motor claims by about half.”

Specific Timeline Improvements

Own Damage Claims: Processing time reduced by 20 working days
Theft Claims: Processing time reduced by approximately 80 working days

These reductions address one of the most common complaints from Malaysian motorists—being left without their vehicles for extended periods whilst waiting for claim settlements. The new timelines ensure that insurers cannot indefinitely delay settlements without proper justification.

What This Means for Motorists

For the average Malaysian driver, these timeline improvements translate to:

• Faster return to normal daily routines
• Reduced reliance on alternative transportation
• Lower overall costs associated with extended vehicle downtime
• Less stress and uncertainty during the claims process

The standardised timelines also create accountability, as insurers must now meet specific deadlines rather than operating with vague, open-ended processing periods.

Own Damage Knock-For-Knock (ODKFK): Game-Changing Protection

One of the most revolutionary changes involves the Own Damage Knock-For-Knock (ODKFK) policy, which fundamentally alters how not-at-fault motorists handle their claims.

How ODKFK Works

Motorists who are not at fault in vehicle accidents can now claim from their own insurance without risking their no-claim discount (NCD). This system allows comprehensive policyholders to:

• Claim directly from their own insurer
• Avoid paying repair costs upfront
• Bypass lengthy negotiations with the other party’s insurer
• Maintain their hard-earned NCD despite being involved in an accident

Simple ODKFK Process

The process is remarkably straightforward:

1. Submit a police report to your insurer
2. Provide other required documentation
3. Your insurer processes the claim directly
4. Your NCD remains intact

This streamlined approach eliminates the traditional frustration of dealing with unfamiliar insurers and potentially hostile claim handlers from the at-fault party’s insurance company.

ODKFK Limitations and Exceptions

ODKFK doesn’t apply universally. The system excludes:

• Accidents involving buses or taxis
• Incidents resulting in personal injury
• Certain commercial vehicle scenarios

However, for “most everyday cases in accidents involving vehicles,” ODKFK provides “a much smoother way to get your car fixed and back on the road.”

Enhanced 24/7 Roadside Assistance Requirements

BNM’s new requirements mandate that all insurance companies provide 24/7 roadside assistance services through mobile applications or websites. This enhancement addresses a critical gap in emergency support for Malaysian motorists.

Benefits of Mandatory Roadside Assistance

Immediate Support: Round-the-clock availability ensures help regardless of when accidents occur
Authorised Services: Reduces engagement with unauthorised tow trucks that often charge excessive fees
Digital Integration: Mobile app and website access provides convenient, immediate assistance requests
Standardised Service: Consistent quality across all insurance providers

This requirement is particularly valuable for Malaysian motorists who previously relied on expensive, unauthorised towing services or faced lengthy waits for assistance, especially during off-hours or in remote areas.

Motor Customer Service Charter: Transparency Revolution

Perhaps the most empowering change involves mandatory Motor Customer Service Charters that all insurers must establish and publish.

What the Charter Contains

These charters spell out “very clearly what kind of service you can expect when making a claim,” including:

• Service standards for different claim types
• Turnaround times for each stage of the process
• Applicable criteria and thresholds for expedited claims
• Clear communication timelines and methods

Charter Accessibility and Accountability

Insurers must publish these charters on their websites, ensuring easy public access. This transparency enables motorists to:

• Compare service standards between different insurers
• Hold insurers accountable to their published commitments
• Make informed decisions when selecting insurance providers
• Set realistic expectations for claim processing

The charter “takes the uncertainty out of ‘how long will this take’ or ‘what can I expect’ and that really empowers consumers when dealing with claims.”

Streamlined Claims Settlement Process

The enhanced Policy Document on Claims Settlement Practices (PDCSP) introduces comprehensive improvements across the entire claims journey.

Key Process Improvements

Notification to Payment: Reduced timelines for every stage from initial claim notification to final payment
Insurer Response Times: Clearer expectations for how quickly insurers must acknowledge and respond to claims
Documentation Requirements: Simplified paperwork and clearer guidelines for required evidence
Communication Standards: Regular updates and progress reports throughout the process

Multi-Stakeholder Collaboration

BNM worked closely with multiple parties to ensure comprehensive improvements:

• Insurance companies and takaful operators
• Transport Ministry for regulatory alignment
• JPJ (Road Transport Department) for documentation processes
• Puspakom for vehicle inspection procedures
• Automotive repairers for practical implementation

This collaborative approach ensures that improvements work effectively across the entire motor insurance ecosystem.

Enhanced Consumer Protection and Recourse

When disputes arise, motorists now have clearer, faster pathways for resolution.

Primary Complaint Process

Step 1: Contact the insurer’s complaints unit (contact details must be clearly published on websites)
Current Response Time: 14 working days maximum
Future Improvement: Response time will be shortened to 5 working days from April next year

Secondary Options

If primary complaints don’t resolve issues satisfactorily, motorists can escalate to:

• Financial Markets Ombudsman Service (FMOS)
• BNM LINK for regulatory intervention
• Specific motor insurance dispute resolution channels

Practical Benefits for Different Motorist Categories

Daily Commuters

• Reduced vehicle downtime means less disruption to work and family commitments
• ODKFK protection encourages defensive driving without fear of unfair penalty
• 24/7 assistance provides peace of mind during regular travel

Commercial Vehicle Operators

• Faster claim processing reduces business interruption
• Clearer timelines enable better business planning
• Enhanced service standards improve operational predictability

Occasional Drivers

• Simplified processes make claims less intimidating
• Clear service charters provide confidence in using insurance
• NCD protection encourages proper reporting of incidents

Implementation Timeline and Expectations

These enhancements are being implemented progressively, with some changes already in effect and others scheduled for the near future.

Immediate Benefits (Already Available)

• ODKFK options for eligible claims
• Enhanced timeline requirements for claim processing
• Mandatory 24/7 roadside assistance
• Published Motor Customer Service Charters

Upcoming Improvements

• Complaint response times reduced to 5 working days (April next year)
• Further refinements based on initial implementation feedback
• Additional consumer protection measures

Addressing Common Concerns and Misconceptions

Fraud Prevention Measures

Enhanced oversight and faster processing don’t compromise fraud detection. BNM’s improvements include strengthened monitoring systems to identify and prevent fraudulent claims whilst expediting legitimate settlements.

Service Quality vs Speed

Faster processing doesn’t mean reduced thoroughness. The new system optimises efficiency without compromising proper investigation and fair assessment of claims.

Universal Applicability

These improvements apply to all licensed motor insurance providers in Malaysia, ensuring consistent benefits regardless of your chosen insurer.

How Motorists Can Maximise These Benefits

Immediate Actions

1. Review Your Policy: Understand your ODKFK eligibility and coverage details
2. Check Service Charter: Review your insurer’s published service standards
3. Update Emergency Contacts: Ensure you have 24/7 assistance details readily available
4. Document Everything: Maintain comprehensive records of any incidents

Ongoing Practices

1. Compare Service Standards: Use published charters when selecting or renewing insurance
2. Know Your Rights: Understand complaint processes and escalation options
3. Stay Informed: Monitor further improvements and regulatory changes
4. Provide Feedback: Share experiences to help refine the system further

The Future of Motor Insurance in Malaysia

These enhancements represent just the beginning of Malaysia’s motor insurance transformation. As implementation progresses and feedback is gathered, further refinements will continue improving the motorist experience.

The focus on transparency, accountability, and consumer empowerment establishes Malaysia as a leader in progressive motor insurance regulation, potentially serving as a model for other regional markets.

For Malaysian motorists, these changes promise a future where motor insurance claims are not just necessary evils but manageable processes that restore normalcy quickly and fairly after unfortunate incidents.

The combination of faster processing, clearer communication, enhanced protection, and robust recourse options creates an environment where motorists can drive with confidence, knowing that support is available when needed.