Can compulsory Malaysian motor insurance ignore property damage which is a direct consequence of a vehicular accident?

On a wet morning outside Seremban, a man named Rajoo was riding to work when a delivery van, taking the corner with more faith than skill, did not stop.

The collision took his right arm at the shoulder.

Pause there, because every judge reading this already knows what to do. Rajoo is an innocent third party, gravely injured by the negligent use of a motor vehicle. The compulsory policy answers for him — the surgery, the long rehabilitation, the lifetime of small adjustments. Nobody disputes it. The statute was written for precisely this.

Now change one fact.

The arm the van destroyed was already gone. Rajoo had lost it nine years earlier, to a machine in a different factory on a different unlucky day. What shattered on the tarmac that morning was the myoelectric prosthesis he had worn every day since — a clever, costly thing of carbon and titanium and patience, fitted to his shoulder and wired to the muscles that remained.

He felt it break as though it were bone.

It was not bone. It was, the insurer was pleased to point out, a chattel.

And a chattel is property. And property damage, the insurer murmured, is not compulsory cover.

So the same loss — the same man, the same van, the same instant — is met by the law in two different voices. Destroy the arm Rajoo was born with, and the statute runs to him. Destroy the arm he bought to replace it, and the statute discovers a sudden and scholarly interest in the law of moveable goods.

One wants to ask the insurer a simple question.

At what point, exactly, did Rajoo become his own furniture?

Be fair to the insurer

Hold that question. We will need it again.

But let us first be fair to the insurer, because the strong version of its case is not stupid, and a judge who has not heard the strong version has not yet earned the right to reject it.

Parliament, says the insurer, chose its words. Part IV of the Road Transport Act 1987 requires every vehicle on the road to carry a policy,¹Road Transport Act 1987 (Act 333), s 90. and fixes what that policy must cover: “any liability — in respect of the death of or bodily injury to any person caused by or arising out of the use of the motor vehicle”.²Ibid, s 91(1)(b). Death. Bodily injury. The draftsman knew the word “property”; he uses it elsewhere; he did not use it here. And everything downstream obeys the same silence — the provisions that sweep away the insurer’s escape hatches, the provision that forces it to satisfy a judgment, are each bolted to that one paragraph and reach no further.³Ibid, ss 94 and 95 (certain restrictions of no effect) and s 96(1) (duty to satisfy judgments), each keyed to the liabilities required to be covered under s 91(1)(b).

It is, the insurer concludes, not for the courts to widen what Parliament has narrowed. We are insurers, not a charity. If the public wants property covered, let the public’s representatives say so.

That is a respectable argument, and the honest advocate concedes its first half without a murmur. The compulsory minimum is injury only. No amount of purposive enthusiasm turns the word “injury” into a shopfront, and a court that pretended otherwise would deserve the reversal it would get.

But notice what the insurer has done. It has answered a question nobody asked.

Nobody says property cover is compulsory. The question was never whether Parliament forced the cover on a reluctant underwriter. The question is what happens when the underwriter sold it.

Because it sold it

Because it did sell it.

The policy on that delivery van was not the bare statutory skeleton. It was an ordinary commercial “third party” policy, the kind sold ten thousand times a day, and such a policy — as every underwriter and every magistrate knows — covers the holder’s liability for damage to third-party property. The insurer wrote that cover. It calculated a premium for it. It collected the premium. It set the cover out in its own schedule, in its own typeface, under its own name.

Then the shopfront fell, and the insurer remembered the statute.

“Property damage,” it said, with the air of a man discovering a technicality in his own favour, “is not compulsory.”

True. And beside the point. The Act keeps a short answer for the insurer who takes the premium for a cover and then shelters behind the narrowness of the floor. Section 91(3): “Notwithstanding anything in any written law, a person issuing a policy of insurance under this section shall be liable to indemnify the person — in respect of any liability which the policy purports to cover”.⁴Ibid, s 91(3).

Read it slowly, because the insurer would rather you did not.

Any liability which the policy purports to cover. Not “any liability Parliament made compulsory”. The subsection reaches for the larger thing — the cover the insurer actually wrote — and it does so “notwithstanding anything in any written law”, which is the draftsman’s courteous way of telling the insurer not to come to court waving the very statute it underwrote beneath.

The floor was laid to protect the victim. It was never meant to be turned over and used as a roof for the insurer.

And the courts have already taken the measure of this particular insurer — the one who pockets the premium and then reaches for a technicality. The Federal Court did so where an insured had sold the very car and lost all “insurable interest” in it: an insurer that has received payment for the policy, it held, cannot look the other way and resile from its promise to indemnify by raising a technical ground.⁵AmGeneral Insurance Bhd v Sa’Amran a/l Atan & Ors [2022] 5 MLJ 825; [2022] 8 CLJ 175 (FC), per Abdul Rahman Sebli FCJ at [46]. The Court of Appeal did so again where the offending car turned out to be a clone, its chassis filed down to impersonate a wreck written off years before; even then the insurer could not escape, because third-party cover under this Act is a statutory liability and not a mere contract, and exists precisely to stop insurers retreating into the small print of their bargain with the insured.⁶Mohd Riza bin Mat Rani & Ors v Zurich General Takaful Malaysia Bhd & Anor [2025] 2 MLJ 224 (CA) at [23]—[24].

Those were claims for injury, where the compulsory machinery applies in terms, and I shall not pretend otherwise; property damage enters the building by a different door. But it is the same building, and the door it enters by — s 91(3), and the ordinary reading of the policy the insurer chose to write — opens onto the same hall. An insurer that may not plead a cloned chassis against a broken leg is in a poor posture to plead a statutory floor against a broken shopfront it agreed to cover.

The older, ruder law

Step back from the policy for a moment, because behind it stands something older and ruder, which bends to no statute and tugs its forelock to no insurer.

The tort.

A driver who carelessly damages your property is liable for it, and for the loss that flows from it. The proposition is so settled that the United Kingdom Supreme Court restated it in 2024 almost as a matter of housekeeping: a person owes a duty not to cause physical damage to another’s property, and on breach must answer for the fall in its value and for the financial loss that follows.⁷Armstead v Royal & Sun Alliance Insurance Company Ltd [2024] UKSC 6.

A small detail earns its place in the margin. The insurer that fought that case to the highest court in the land was Royal & Sun Alliance. Insurers will travel a very long way, and spend a very great deal, to make property damage look smaller than it is.

So the shopkeeper’s difficulty was never his right. His difficulty, like every victim’s, is collection — whether anyone solvent is standing at the far end of the judgment. Which is exactly why the law made motor insurance compulsory in the first place, and exactly why the insurer’s retreat is so unbecoming. The whole apparatus exists so that the innocent are not left holding a worthless decree against a wrongdoer with empty pockets. To raise that apparatus for the body, and then quietly omit the livelihood, is to do half a job and call it a principle.

Look across the water

“But this is how it has always been,” says the insurer, and on this it is nearly right. It is how it has been here. It is not how it is everywhere — and the difference is instructive, because nothing in logic compels the line we have drawn.

Look across the water.

England met the same question and answered it the other way. Its Road Traffic Act 1988 requires the compulsory policy to cover “death or bodily injury — or damage to property”.⁸Road Traffic Act 1988 (UK), s 145(3)(a). Property sits inside the minimum — though the draftsman, his nerve failing at the last, capped the property cover at a figure he never dared place on life or limb.⁹Ibid, s 145(4)(b), capping compulsory cover for third-party property damage while leaving cover for death and bodily injury uncapped. A broken body: without limit. A broken building: up to a number. An Englishman’s home is his castle, valued at the statutory rate.

India was more candid still, and more alarming. Section 147 of its Motor Vehicles Act brings in “damage to any property of a third party” — and then caps the insurer’s liability for the whole of it at six thousand rupees.¹⁰Motor Vehicles Act 1988 (India), s 147(1)(b)(i) and (2)(b). A life, there, is beyond price. The entirety of a man’s property is worth about a decent dinner. One admires the honesty, if not the arithmetic.

Singapore kept to the older austerity we inherited together: death or bodily injury, with property left to private contract.¹¹Motor Vehicles (Third-Party Risks and Compensation) Act 1960 (Singapore), long title and operative provisions; compulsory cover there does not extend to third-party property damage, which must be separately purchased. So did we.

The moral is not that one of these models is dictated by reason. It is that none of them is. The line between the body and the thing is drawn here, redrawn there, capped in one place and abolished in another. It is an inheritance, not a law of nature — and a judge asked to read it generously is not being asked to invent. He is being asked to notice that much of the Commonwealth has already moved, and to consider whether it is not time we caught up.

The seam showing

Which returns us, at last, to Rajoo’s arm, and to the question we left hanging.

At what point did he become his own furniture?

The honest answer is that he never did — and that the law’s embarrassment in his case is a clue to its error in the shopkeeper’s. A prosthesis is “property” in the way a passport is “paper”. In form, yes; in substance, no. It is function — mobility, grip, balance, the ordinary business of the day — and the personal-injury courts have always understood as much, treating the provision of such a device as a head of damage flowing from injury to the person, not as the price of a replaced gadget.¹²Prosthetic and orthotic provision is a recognised head of personal-injury damages, awarded to restore bodily function rather than as the price of a replacement chattel. No court tells an amputee that his loss is answered by buying another object.

So Rajoo’s case is not an awkward exception. It is the seam showing. It reveals that “property” is not a single thing but a spectrum: at one end the dented bumper, pure chattel; at the other the shattered limb-substitute, property in form and bodily integrity in fact. A statute that files the second under “damage to property” and waves it past the compulsory minimum has mistaken the label for the thing.

And once the seam is visible, the shopkeeper looks different too. His shop is not his arm; nobody pretends it is. But it was his livelihood — the means by which he fed his family and kept his place in the world — destroyed in the same instant, and by the same carelessness, as Rajoo’s arm, and met by the same shrug.

Which raises the question the insurer would most prefer left in the dark.

Why this line, and why here?

Compulsory motor insurance is not ordinary commerce. It is a social instrument, and the Act says so in its own preamble, which lists among its objects the “protection of third parties against risks arising out of the use of motor vehicles”.¹³Road Transport Act 1987 (Act 333), long title and preamble. The Federal Court has put it more plainly still: the purpose is to give the innocent road-accident victim full and effective protection, whatever bargain the insurer happened to strike with the insured.¹⁴Malaysia National Insurance Sdn Bhd v Lim Tiok [1997] 2 CLJ 351; [1997] 2 MLJ 165 (FC); see also Letchumanan a/l Gopal v Pacific & Orient Insurance Co Bhd [2011] 6 MLJ 788 (CA) on the third party’s vested right under s 96(1).

Hold that stated purpose against the asymmetry. One negligent driver, in one instant, breaks a man’s leg and burns down another man’s shop. The leg is protected against the wrongdoer’s insolvency. The shop is not. The one victim may reach the insurer; the other is handed a sheet of paper marked “judgment” and wished a pleasant afternoon.

The clean argument here is not the brute one. It is not that “injury” secretly contains a shopfront — that road ends at a reversal. It is constitutional, it is narrower, and it is harder to wave away. Article 8 of the Federal Constitution guarantees every person equality before the law and its equal protection. The State may classify — of course it may — but a classification must rest on a real and intelligible difference bearing a rational relation to the object of the law; and since Sivarasa the guarantee carries a proportionality dimension besides, so that a difference in treatment must not be arbitrary or excessive when measured against the statute’s own purpose.¹⁵Sivarasa Rasiah v Badan Peguam Malaysia & Anor [2010] 2 MLJ 333; [2010] 3 CLJ 507 (FC); on reasonable classification, Datuk Haji Harun bin Idris v Public Prosecutor [1977] 2 MLJ 155.

Put our scheme to that test. Its object is to protect the innocent against the social risk created by motor vehicles. Within that single class of victims, it secures the man whose body is harmed against the wrongdoer’s insolvency, and abandons the man whose home, whose business, whose very limb-substitute is destroyed by the same negligence to the wrongdoer’s bare pocket. The complaint is not that a leg and a warehouse are the same. It is that a statute built to protect victims should be able to say why it guards the one and deserts the other — and “we have always done it this way” is a habit, not a reason.

The point reaches past flesh, which is where the company’s case quietly enters. A company feels no pain, but it is a “person” able to invoke Article 8 in its proper context, and a firm whose premises and stock are reduced to ash by a runaway lorry may fairly ask why the scheme that shields one innocent victim deserts another.¹⁶A company is a “person” for many constitutional purposes and may invoke the equal-protection guarantee in an appropriate context, subject to the accepted limits on corporate reliance on rights that are inherently personal. Equality is concerned with unjustified differences in legal protection, not only with who is able to feel the burn.

I do not put this higher than it will bear. No court has yet struck the line down, and a court may yet find the rational basis the insurer has never troubled to articulate — the actuary’s preferences, the fear of fraud, the dread of a flood of claims. The argument is not, today, a settled rule.

It is something subtler, and for a judge more useful: a standing reason to read every ambiguity in the scheme, and every insurer defence built upon the floor, in the way that least deserts the victim the statute was raised to protect.

A homecoming

So we come back to the bench, and to the quiet revolution this essay has been pressing all along — which is not a revolution at all, but a homecoming.

The judge asked to cover Rajoo’s prosthesis, and the shopkeeper’s ruined shop, is not being asked to rewrite the Act. He is being asked to read it as it was meant — as a victim-protection statute, written in the language of protection, whose floor was never meant to be the insurer’s ceiling, and whose silence on property is an inheritance to be examined rather than an oracle to be obeyed.

He need say nothing so undignified as “I was wrong”. He need only say what was true all along: that where an insurer has sold the cover and banked the premium, s 91(3) makes it answer for what it sold; that the tort never doubted property for an instant; that some property is the person; and that a statute about protecting the innocent ought to protect them, and not merely the half of them whose injuries happen to be made of bone.

The shopkeeper, sweeping glass from what used to be his counter, will never follow the distinction between a statutory floor and a contractual extension. He knows only that the same carelessness took both his health and his shop, and that the law ran to the one and strolled to the other.

And Rajoo, learning to live a second time without his arm, will not be told which of his two losses the law felt able to dignify.

The least we can do — the least a great court should be willing to do — is to stop asking them at what point they became their own furniture.

∞§∞

This article is written for a general readership and does not constitute legal advice. Readers with a specific problem should take independent advice on their own facts.

Rajoo and the shopkeeper are illustrative figures; no actual party, matter or award is depicted.

The author thanks KN Geetha, TP Vaani, JN Lheela and Lydia Jaynthi.

Claude, Anthropic’s AI, assisted with drafting and verification; the statutes and authorities were checked against source. Advocate and machine together made one essay better than either alone. The argument, the views, and any remaining errors are the author’s.

Image credit: Conor Samuel of Unsplash

© GK Ganesan Kasinathan. All rights reserved. Any use requires written permission: gk@gkganesan.com.