Tan Chong Insurance Business Stream (TCIBS) and AXA Affin General Insurance today launched the availability of RTI-GAP Insurance for Nissan cars in Malaysia.
RTI-GAP basically means Return to Invoice-Guaranteed Asset Protection. This type of insurance is actually pretty common and sometimes even mandatory to be purchased in first world countries, but we’re only just seeing it introduced in Malaysia this year.
This type of insurance basically ensures that you won’t have any problems covering your outstanding hire purchase loan if your Nissan is stolen or is declared a total loss because of damage. It also helps you easily replace your car with another Nissan of similiar value.
Let’s say you bought your Nissan at RM80,000 and after three years the value drops to RM50,000. If something happens to the car at that point of time, you will only be reimbursed the market value of RM50,000 by your motor insurance. And if you still owe the bank RM60,000 at that point of time, you will have to fork out RM10,000 extra to pay off your hire purchase loan.
This is where RTI-GAP insurance comes in. It will pay the difference between the market value and the original purchase price. This means you will get a payout of RM30,000 which is the difference between the RM50,000 market value and the RM80,000 original purchase price. You can then use RM10,000 for the difference in hire purchase outstanding and RM20,000 to pay for the downpayment of a new Nissan to replace the one that was declared a loss.
You are allowed to buy RTI-GAP insurance for up to 5 years but in Nissan’s case, you are already protected for your first year under the “Nissan for Nissan” scheme if you buy your motor insurance through TCIBS. This means you have the option of buying coverage for the 2nd year up to the 5th year.
Here are some sample premium rates for an RM80,000 car, excluding 6% GST.
This premium is only payable one time upon purchasing the car so think of it like an “MRTA”. Tan Chong says they are also working to see if they can bundle the premium under the hire purchase loan. If you buy coverage for three years and sell the car before the three years are up, you can get a refund on the balance coverage period.
The maximum applicable purchase price that can be insured under RTI-GAP is RM385,000 and the maximum benefits payable is RM115,000. RTI-GAP insurance is only applicable for private registration cars.
