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Getting a comprehensive car insurance policy that entails almost every aspect of risks that could occur might sound like an ideal thing to have. Therefore, in order to protect the loss of liability of the insured as the car owner, or the authorized driver against the passengers, Legal Liability to Passenger coverage is the right choice.
Should You Get Legal Liability to Passengers (LLP) Insurance Coverage?
Legal Liability to Passengers or also known as LLP is a car insurance policy that offers coverage to you as the car owner. It applies in cases of bodily injury or death of your car passenger due to your or an authorized driver’s negligence.
In Malaysia, Legal Liability protection is a separate add-on premium divided into two types, namely;
- Legal Liability to Passengers (LLP);
- Legal Liability of Passenger for Act of Negligence (LLOP).
What Is Legal Liability to Passengers?
In auto insurance, LLP offers limited coverage to the car owner for legal liability resulting from the death or bodily injury of one or more passengers. This coverage applies when the incident is caused by your or the authorized driver’s negligence.
LLP coverage is not included in first-party insurance, third-party, fire and theft insurance, or third-party insurance. This requires policyholders to sign up for a separate additional premium for Legal Liability coverage if they plan to add legal liability protections to their insurance policy.
When Will It Be Used?
Imagine this scenario: the car owner runs a red light, leading to a car crash. Unfortunately, two passengers in the back seat sustained bodily injuries from the crash. As third parties, they can file a lawsuit against the car owner due to negligence for reckless driving.
This is when LLP will be employed, ensuring the insured does not have to pay the losses out of pocket. The additional coverage will cover the liability for injuries to passengers in the insured car while boarding, entering, or alighting.
How Much Does This Coverage Cost?
Generally, the insured will have to pay 25 percent of their premium for a basic third-party insurance policy to include LLP coverage in their car insurance plan.
Exclusions Under Legal Liability to Passengers Coverage
Nevertheless, several situations will be deemed unfit for coverage of losses under LLP, such as:
- Death or bodily injury to any passenger being carried for hire or reward;
- Death or bodily injury to any person where such death or injury arises out of and in the course of the employment of such person by you or your authorized driver;
- Damage to property belonging to or in the custody or control of, or held in trust by, you or your authorized driver and/or any member of your or your authorized driver’s household;
- Liability to any person who is a member of your and/or your authorized driver’s household, who is a passenger in your car unless he/she is required to be carried in or on your car by reason of or in pursuance of his/her contract of employment with you or your authorized driver and/or his/her employer;
- Liability caused by a passenger traveling in or alighting from your car;
- Any claims brought against you by any driver of your car, whether authorized or not;
- Any claims brought against any person in any country in courts outside Malaysia, Singapore, or Brunei; and/or
- All legal costs and expenses that are not incurred in or recoverable in Malaysia, Singapore, and Brunei.
How to Claim If the Number of Passengers Exceeds the Maximum Limit Permitted by Law?
In occurrences such as this, the liability covered by the insurer is limited to the permissible number of passengers specified for the vehicles registered under the Road Transport Department (JPJ). Therefore, if the car owner is driving a seven-seater car while carrying more than seven people during the collision, the claim will not be paid in full.
Instead, the calculation used to divide claims made under legal liability to passengers’ coverage is formulated as below:
Claim Calculation Formula If Passengers Carried Exceed The Passenger Limit = Number of passengers permitted by law / Actual number of passengers carried at time of incident X Total claim awarded
Safeguarding Against Passenger-Related Legal Issues
In a nutshell, Legal Liability to Passengers covers you against any legal responsibility you may have towards your passengers in an accident caused by your negligent driving. Indirectly, it safeguards your financial security, which might be at risk due to unforeseen occurrences while you are on the road.
For more information on legal liability coverages, other car insurance add-ons, as well as basic coverages in auto insurance, reach out to us at Qoala. As a premier platform for insurance comparison and renewal, Qoala is committed to assisting you in finding the best car insurance policy.
