Credit Shortfall Private Car Policy Document

How to read this document:

Please note that Your Motorcycle Policy only starts from page 3 onwards. To help You read and understand Your policy better We provide some explanatory notes together with comments and examples (written in italic). These are not meant to be part of Your policy and should not be used to interpret Your insurance contract in the event of any dispute.

Please refer to Definition on page 9 for the meaning of these words.

What makes up Your insurance contract?

Your insurance contract with Us is made up of the following:

• Insurance policy in pages 3 to 8 (excluding the italic texts); 
• The information You provided Us when You applied for this insurance;
• The Schedule; and 
• The Policy Wording.

All these must be read together as they form Your insurance contract.

When is Your cover effective?

This insurance is effective from the time of purchase of cover or at the agreed time of commencement, until the expiry date. The period of insurance will be printed in the Policy Schedule and related documents. If there is any change to these dates, it will be officially shown in an Endorsement issued by Us.

1. Consumer Insurance Contract

Where You have applied for this insurance wholly for purposes unrelated to Your trade, business or profession, You have a duty to take reasonable care not to make a misrepresentation in answering the questions in the Proposal Form (or when You applied for this insurance) i.e. You should have answered the questions fully and accurately. Failure to have taken reasonable care in answering the questions may result in avoidance of Your contract of insurance, refusal or reduction of Your claim(s), change of terms or termination of Your contract of insurance in accordance with Schedule 9 of the Financial Services Act 2013. You were also required to disclose any other matter that You knew to be relevant to Our decision in accepting the risks and determining the rates and terms to be applied.

You also have a duty to tell Us immediately if at any time after Your contract of insurance has been entered into, varied or renewed with Us, any of the information given in the Proposal Form (or when You applied for this insurance) is inaccurate or has changed.

2. Non-Consumer Insurance Contract

Where You have applied for this insurance for purposes related to Your trade, business or profession, You have a duty to disclose any matter that You know to be relevant to Our decision in accepting the risks and determining the rates and terms to be applied, and any matter a reasonable person in the circumstances could be expected to know to be relevant, otherwise it may result in avoidance of Your contract of insurance, refusal or reduction of Your claim(s), change of term(s) or termination of Your contract of insurance. You also have a duty to tell Us immediately if at any time after Your contract of insurance has been entered into, varied or renewed with Us, any of the information given in the Proposal Form (or when You applied for this insurance) is inaccurate or has changed.

If You misrepresented any facts to Us before the policy is entered into, examples of the actions that may be taken by Us against You include the following: 

• Declare Your policy void from inception (which means treating it as invalid), and We may not return any premium; 
• Cancel this policy and return any premium less Our cancellation charge or recover any unpaid premium; 
• Recover any shortfall in premium; 
• Not pay any claim that has been or will be made under the policy; or
• Be entitled to recover from You the total amount of any claim already paid under the policy or any claim. We have to pay because of any relevant road traffic legislation, plus any recovery cost. 
  

In consideration of the payment of the premium by You, We shall, subject to the terms, conditions, limitations, exclusions and any endorsement(s) of this Policy, provide the insurance detailed in this Policy. The Proposal submitted to Us shall form the basis of this Policy. It is Your duty to disclose all material facts. Failure to disclose this information may entitle Us to avoid this Policy.

This Policy witnesses that in consideration of payment of the agreed premium and on the basis of the information declared in the Policy Schedule, We have been authorised to pay the amount owing to Your financier following a Total Loss settlement by Your underlying motor policy with Us, subject to the terms and conditions contained in this Policy.

The Policy shall become operative on the Policy Inception Date as declared in the Policy Schedule and will continue in force until termination or cancellation in accordance with the terms and conditions contained in this Policy. This Policy reflects the terms and conditions of the contract of insurance as agreed between You and Us. 

This section outlines what We will cover under Your credit shortfall policy.

We cover the difference between the Sum Insured or market value (whichever is greater) of Your motorcycle insured with Us and the outstanding settlement value in terms of a credit agreement that You entered into.

We will pay this difference only if We accept a claim for Your motorcycle which was either:-

• In Our opinion beyond economic repair following loss or damage; or
• Stolen and not recovered.

No claim will be paid if the Sum Insured or market value (whichever is greater) of the underlying motor policy exceeds the outstanding settlement value in terms of the credit agreement.

The credit agreement that You entered into must fall under the definition of credit agreement given in the Hire- Purchase Act 1967. 

Our compensation is limited to any amount still outstanding on Your credit agreement less any arrear instalments or rentals, including interest payable on the arrears.

In the event of a claim as defined under credit shortfall above, We will compensate You for the deposit paid on the insured motorcycle. Our compensation is limited to 10% of the insured motorcycle Sum Insured at policy inception, with a maximum of RM2,500. 

For terms and conditions see section 2. Coverage provided by this policy below.

All the exclusions of the underlying policy apply to this policy. If We state that a claim is not covered because of any of these exclusions, You must prove to the contrary. 

This section outlines the terms and conditions that You must observe to ensure this insurance remains effective. Basically these conditions are of three types:

• What You must do
• What You must not do
• What We can do

Conditions Precedent to Policy Liability

The following conditions are conditions precedent to Our liability to indemnify You under this Policy and have to be observed by You strictly. We can repudiate this Policy and /or will not pay claims under the Policy if You breach any of the relevant conditions.

Cover under this policy is provided subject to the following Terms and Conditions:

1. Basis of this policy

This policy, the Schedule, Our correspondence to You, Your application for insurance and any statement, written or spoken, made by Your, or on Your behalf, forms the contract between Us and You.

 2. Cover provided by this policy

We cover the difference between the Sum Insured or market value (whichever is greater) of Your private car insured with Us and the outstanding settlement value in terms of a credit agreement that You entered into. We will pay this difference only if We accept a claim for Your private car which was either: 

• In Our opinion beyond economic repair following loss or damage; or
• Stolen and not recovered.

No claim will be paid if the Sum Insured or market value (whichever is greater) of the underlying motor policy exceeds the outstanding settlement value in terms of the credit agreement. Cover under this policy is subject to a valid underlying motor policy being in force with Us at the time of the event. You must comply with all of the conditions of the underlying motor policy.

All terms and conditions under the underlying motor policy will apply to this credit shortfall policy.

3. Class of use

Private

If the use of Your vehicle is shown in the Schedule as “Private”, it may be used for social and domestic purposes and for purposes of pleasure. Your vehicle may also be used for Your profession and journeys between Your place of residence and permanent place of business. It may also be used for the purpose of business, trade or occupation, but only in exceptional circumstances. If You use Your vehicle for business, trade or occupation regularly, for example, You use it for business once or twice every week, it will not be covered under the Private class of use.

4. Interest of a Hire Purchase Company

 If a valid claim occurs and Your vehicle is the subject of a credit agreement as defined in the Hire- Purchase Act 1967, We will pay the Hire Purchase Company the outstanding amount of Your loan.

The underlying policy will pay the difference to you where the outstanding amount is less than the sum insured for Your vehicle as shown in the underlying policy Schedule. 

This credit shortfall policy will not make payment where the outstanding amount is less than the sum insured in the underlying policy Schedule. 

5. Period of this policy

The period of this policy is the period from the start date of this policy, as shown on the Schedule, to the expiry date shown in the Schedule. After the period of this policy, all cover under this policy will expire.

6. Payment of premium

You must pay Your premium in cash before the inception date of this policy.

7. Duty of care 

You must take all reasonable precautions and all reasonable care to prevent or minimise loss or damage. 

8. Cancellation

8.1 If You are not satisfied with the cover provided in this Policy, please advise Us of Your cancellation request in writing within seven (7) days of the Policy Inception Date. We will then refund the premium, provided no claim has been paid.

8.2 You can cancel this Policy at any time. The refund will be paid upon request provided no claim was made on this policy. The table below outlines the refund schedule:

8.3 We may cancel this policy by giving You 14 days’ written notice of the cancellation by registered post to Your postal address as shown in the Schedule. You will then be entitled to a refund of premium for the unexpired period calculated on a pro-rata basis from the date we receive the Policy Schedule from You to the expiry date of the policy. There will not be a refund of premium if a claim was made on this policy.

9. Termination

9.1 The insurance provided hereunder will automatically terminate on the occurrence of one of the following:-

a) The natural expiry date of the policy; 

b) Payment of a claim under the policy;

9.2 The Policy will automatically lapse once You sell or dispose of Your vehicle because Your insurable interest in the vehicle will cease.

9.3 The date Your Policy is cancelled.

10. Your rights

10.1 You may not cede or assign Your rights or obligations to another person. No other person may make a claim against Us.

10.2 You may not transfer the cover under this policy from one vehicle to another.

11. Claim Conditions

11.1 Claim settlement basis We will compensate You by paying cash. Before We finalise or settle any claim, We may require You to sign a discharge voucher.

11.2 Claim procedure

If Your Car is involved in any Incident that could lead to a claim under this Policy, You must do the following:

a) Notify Our claims department of the Incident and get a Claim Form. You must notify Us of the Incident as soon as possible but in any event: 

• Within seven (7) days if You are not physically disabled or hospitalised following the Incident; or
• Within thirty (30) days or as soon as practicable if You are physically disabled and hospitalised as a result of the Incident. We may allow a longer notification period if You can provide specific proof and justification for the delay.

b) Report the Incident to the police as required by law and do all that is required to assist the police authorities to secure a conviction against the offender.

c) Complete the Claim Form in full and return it to Us within twenty-one (21) days from the date of Your notification as per (a) above. You are required to answer all the questions in detail in all applicable sections and provide Us with all the necessary documents to support Your claim. We will not be held responsible if there is any delay on Your part to submit the Claim Form duly completed together with all the necessary documents. A longer claims submission period may be allowed by Us subject to specific proof and justification by You for the delay.

11.3 Our rights after an event which may lead to a claim

a) You must supply all information and assistance that We reasonably require and We may take over the defence or settlement of a claim and conduct it in Your name.

11.4 Fraudulent or wilful acts You will lose all rights to claim under this policy if: a) a claim is fraudulent or if You or anyone acting on Your behalf uses any fraudulent means to obtain any benefit under this policy; or b) a claim occurs due to a deliberate, or wilful, or intentional act committed by You or with Your involvement or anyone acting on Your behalf; or c) information or documents in support of a claim, whether created by You or on Your behalf, is not true, is not complete or is fraudulent.

11.5 Dispute Resolution If there are differences or disputes on any matters relating to this Policy involving amounts exceeding RM250,000, an Arbitrator shall be jointly appointed by You and Us in writing to resolve the differences or disputes. If no agreement is reached on who is to be the Arbitrator within one month of being required to do so then You and We shall be entitled to appoint an Arbitrator each. Both Arbitrators shall then proceed to hear the difference or dispute together with an Umpire to be jointly appointed by them. If the Arbitrators cannot agree on an Umpire within thirty (30) days, then the Kuala Lumpur Regional Centre for Arbitration shall appoint an Umpire. If the disputed sum is less than RM250,000, You may refer the matter to the Ombudsman for Financial Services to resolve the dispute. 

11.6 Premium refund a) If We settle a claim under this policy during the period of insured, We will not refund any premium on this Credit Shortfall Policy for the remainder of the period of Your insurance. 

11.7 Notice of a claim a) Notice of a Claim or circumstances shall be made in writing and delivered by post, email or fax to Pacific & Orient Insurance Co. Bhd, Wisma Bumi Raya, No. 10, Jalan Raja Laut, 50350 Kuala Lumpur. Tel No. 03-2698 5033 and Fax No. 03-2693 8145. b) Notice shall include full details of all material facts of which You are aware, including: (i) the date, time and place of the Claim or circumstances;

(ii) a detailed description of what happened; 

(iii) the name and address of the injured party; 

(iv) the names and addresses of all witnesses; and 

(v) copies of any demand, notice or legal paper received in connection with the Claim or circumstances.

12. Other insurance 

If a claim is payable under this policy and under any other policy, We will only pay Our proportional share of the claim. 

13. Information that affects the risk

 We may declare this policy invalid if You:

a) have not given Us all the details that affect the risk; or 

b) have misrepresented or misdescribed any details that affect the risk. You must advise Us immediately of any change in the risk. Should there have been any material change in the risk, then We may amend the cover and premium from the date of the change. If You do not inform Us of any material change in the risk, We will be entitled to avoid the policy or reject any claim that occurred after the change in the risk. In this instance the term “You” includes any person acting on Your behalf.

14. Jurisdiction

This policy is subject to the jurisdiction of the courts of Malaysia. Malaysian law will apply.

15. A person who deals on Your behalf

You give up Your right to receive compensation if a person who deals on Your behalf does not comply with the terms and conditions of this policy for the event or claim.

16. Amendments to conform to law

You and We agree that any terms or conditions of this policy that are against any law will be amended to conform to such law.

17. Reference to singular and plural

In this policy, references to the singular include the plural and references to the plural include the singular.

18. Prevalent policy wording

For avoidance of doubt, the English version of this Policy wording will prevail over the Bahasa Malaysia version at all times.