Located at the equator, Malaysia has a tropical climate characterised by hotter temperatures, more humidity and high rainfall year-round. Between the monsoon season of November and March, the Malaysian peninsula typically experiences the heaviest rainfall, especially on the east coast.
In recent years, the frequency of floods has been on the rise, accounting for 85% of natural disaster events in the country since 2000. The financial losses incurred by floods in Malaysia reached RM6.1 billion in 2021, with public infrastructure, residences and vehicles having recorded the highest losses.
On the back of this, more individuals may be considering flood insurance, which is gaining popularity in Malaysia.
What Is Flood Insurance?
In Malaysia, flood insurance is not compulsory. In fact, most of the insurers do not offer flood insurance as a standalone policy.
While most home insurance policies include flood coverage, you typically have to opt for additional flood coverage or buy more comprehensive motor insurance policies to enjoy flood coverage. Protection against flood is also commonly referred to as special perils insurance that cover damages to your home or vehicles caused by natural disasters including floods, landslides, typhoons, windstorms, hurricanes, earthquakes, volcanic eruptions and sinkholes.
Some insurance companies let you choose to have full coverage (100% of the vehicle sum insured) or partial coverage at a cheaper premium.
Comparing Flood Insurance On Motor Insurance Policies In Malaysia
Motor insurance policies differ according to the insurance provider. Comprehensive motor insurance policies typically include towing service, emergency roadside assistance and coverage for all drivers.
Berjaya Sompo Insurance’s comprehensive motor insurance policy includes special perils coverage so you don’t have to separately add it to your policy.
Other insurance providers such as Kurnia Insurance also provide flood relief allowance of up to RM3,000 for damages to your vehicle. Allianz offers compassionate flood coverage with a one-time payout of RM3,000 under the Rahmah Insurance Initiatives by the government.
Meanwhile, Etiqa offers third-party motor insurance, which covers third party bodily injuries and losses as well as damages to your own vehicle due to accidental fire, theft or accident. You can separately add on flood coverage to the policy for more comprehensive protection.
How Much Does Flood Insurance Cost?
The cost of flood insurance varies depending on the insurance company and type of vehicle you own. According to Persatuan Insurans Am Malaysia (PIAM)’s data, additional flood coverage under motor insurance costs around RM30 to RM635 per year.
Insurance companies calculate the premium of flood coverage according to the vehicle’s sum insured.
Insurance provider Generali charges 0.2% premium rate of the vehicle’s sum insured for additional flood coverage. For example, if your vehicle’s sum insured is RM50,000, you can add flood coverage to your car insurance for additional premium of RM100.
According to Kurnia Insurance, getting an additional flood coverage to your motor insurance policy typically costs around 0.2% to 0.5% of your vehicle’s sum insured.
As for flood coverage for homes, the standard houseowner and householder insurance policy usually offers flood protection as part of the package. Additionally, the houseowner and householder insurance also provides coverage for fire, theft and incidences like pipe bursting.
The cost of houseowner and householder insurance depends on the type of property you have and the extensiveness of coverage – whether you require coverage for only the building, the house contents or both.
Typically, the higher the sum insured, the higher the premium. Using Etiqa’s calculator on its website, a landed property worth RM400,000 with home contents worth RM20,000, you will need to pay a premium of around RM450 for a year’s coverage.
How To Buy And Claim Flood Insurance?
First, you can check if your current motor insurance policy already includes flood coverage. If the existing policy does not have flood coverage, you can add flood coverage to your motor insurance policy when you renew the policy after one year.
Should your vehicle or home be affected by floods, you can take the following steps.
Step 1: Ensure that you and your family are safe. If assistance is needed, you can call Malaysia Emergency Response Services (MERS) at 999.
Step 2: Capture photos of your damaged vehicle or property in multiple angles.
Step 3: Contact your insurance agent and provide all the documents required to file a claim.
Read Also: Malaysia Car Insurance: The Types Of Policies And What Is Sufficient Coverage
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