It is really the policyholders’ option. However, it is recommended to insure with COE for the following reasons:
- Financial institutions that extend the vehicle loans, for credit prudence,
would generally expect the value of insurance coverage to be at least equivalent
to the loan amount.
- By insuring without COE, the insured is assuming the hassle as well as
the financial exposure in the disposal of the COE refund certificate which
is usually sold in the open market at a discount. The extent of the financial
exposure will depend on the extent of the discount which is subject to demand
and supply dependent on the new car market condition.
- The saving in premium of 5% is negligible compared to the peace of mind
received when the vehicles are insured with COE.