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January 16, 2025What to do when your car is declared ATL or BER in Malaysia
Here’s a handy resource for Malaysian motorists on their rights, the claims process, and tips for handling insurance/takaful situations.
Owning a car comes with its share of ups and downs, but nothing quite prepares you for the moment when your beloved ride is declared a total loss. Total loss occurs when repair costs exceed the vehicle’s actual cash value (ACV).
There are two types of total loss vehicles—Actual Total Loss (ATL) and Beyond Economic Repair (BER). If the repair costs exceed the vehicle’s ACV determined by its age, condition, and current market or agreed value, insurers or takaful operators (ITOs) may declare it a total loss under BER.
What do they really mean? More importantly, how do they affect your motor insurance/takaful claim? Let’s break it down!
What is Actual Total Loss (ATL)?
ATL happens when your vehicle is so badly damaged that the structural integrity is compromised and not roadworthy or unfi t to be driven. ITOs typically classify a car as ATL if :
Examples of ATL:
- Your car is completely wrecked in a major accident.
- Your car is stolen and recovered, but it s been stripped down or severely vandalised.
- Your car is submerged in a flood and the damage is extensive.
What is Beyond Economic Repair (BER)?
Example:
Examples of BER:
- Your car suffers severe damage in an accident.
- The cost of parts and labour to fix your car is prohibitively expensive, even though it s technically
repairable.
Different insurers or takaful operators have different thresholds, so always check your policy/certificate.
Ot-to Guide 1
Insuring a BER vehicle is subject to the insurers’ or takaful operators’ underwriting requirements.
Be sure to understand coverage required, read the policy/certificate document and compare options to find the best fit.
How do ITOs determine ATL or BER?
Repair costs – ITOs will get assessments from workshops to determine how much it would cost to fix your vehicle
Market value – If fixing your car costs more than what it’s worth, insurers or takaful operators will likely declare it BER.
Agreed value – If you have an agreed value in the policy/certificate, the ITO will compensate you based on a pre-agreed amount, rather than market depreciation.
Depreciation – Cars lose value over time, so insurers will take this into account.
Chassis and structural damage – Even if repair costs are low, a compromised chassis = ATL.
Ot-to Guide 2
Vehicles declared BER by ITOs are assessed and repaired appropriately, with all necessary documentation including the roadworthiness certification by a credible vehicle inspection provider before the vehicles are permitted on the road.
What to do if your vehicle is declared ATL or BER?
If your car is written off, don’t panic—follow these steps:
Communicate with insurers or takaful operators (ITOs) – Your ITO will guide you on what to do next.
Prepare documentation – You’ll need your police report, adjuster’s report, vehicle grant, and insurance policy/takaful certificate
Settlement and payout – Depending on your policy/certificate, your ITOs will compensate you based on the market or agreed value.
Hand over the vehicle – ITOs usually take possession of an ATL vehicle, which will be deregistered and scrapped.
Check if you need to pay the bank – If you have an outstanding car loan, ITOs will make a settlement to the bank first. The balance, if any, will be paid to you.
Ot-to Guide 3
If your vehicle is declared ATL or BER, your No Claim Discount (NCD) resets to 0%, meaning your next premium/contribution will be higher.
Note: For more details on claims for ATL and BER vehicles, you may refer to Bank Negara Malaysia’s (BNM) document on Claims Settlement Practices, on page 53 and 54.
Ot-to Guide 4
Types of compensation
- Agreed value: Insurer or takaful operator will compensate you as agreed on the motor policy/certificate.
- Market value: Compensation is based on the car’s market value at the time of the accident, not the time of insurance renewal.
How to be better prepared for ATL or BER situations:
Ensure adequate coverage – Make sure you have sufficient insurance/takaful coverage. Consider getting Agreed Value coverage if you want more certainty about the payout in case of a total loss.
Drive safe – Avoid risky driving behaviours to minimise the chance of severe accidents.
Contact your insurers or takaful operators promptly – The sooner you report, the faster your claim can be processed.
Review your policy/certificate – Take the time to read and understand your insurance policy. This will help you know what's covered and what's not.
Be cautious when buying second hand cars – Make sure to make informed decisions. Should you decide to buy a repaired BER vehicle, please request for the roadworthiness certificate issued by PUSPAKOM or any other authorised Vehicle Inspection Provider (VIP).
Ot-to Guide 5
Bank Negara Malaysia (BNM) has been pushing for clearer claims settlement practices, ensuring that insurers or takaful operators are fair and transparent in their dealings with policyholders/certificate holders. This includes how they handle ATL and BER cases.
This article is part of a ‘Jom, Level Up’ campaign under Phased Liberalisation 2.0, Consumer Education Programme (CEP), by Persatuan Insurans Am Malaysia (PIAM) and Malaysian Takaful Association (MTA).
Disclaimer: The information is provided for general information only. PIAM and MTA make no representations or warranties in relation to the information, including but not limited to any representation or warranty as to the fitness for any particular purpose of the information to the fullest extent permitted by law. While every effort has been made to ensure that the information provided in this article is accurate, reliable, and complete as of the time of writing, the information provided in this article should not be relied upon to make any financial, investment, real estate or legal decisions. Additionally, the information should not substitute advice from a trained professional who can take into account your personal facts and circumstances, and we accept no liability if you use the information to form decisions.