can.
kastam thailand don't care about your malaysian insurance.
they only care about thailand compulsory insurance (3rd party insurance) that covers their people.

most people don't buy voluntary insurance when entering thailand.
most people that buy voluntary insurance don't buy extension 101 when entering thailand.
and most people that did buy all three CI, VI and ext101 don't buy travel insurance.

it's rare for malaysian tourists to buy all 4: CI, VI, ext101 and TI just to go to hatyai.
1 week for all 4 insurance is upwards of RM500 so most people skip.