The recent flash flood that hit Malaysia has affected many people nationwide. The flood risk is likely to persist during this monsoon season and it is of huge concern as many Malaysians are still uninsured against flood.
According to the ASEAN Insurance Pulse 2021 report, “Malaysia is one of the most urbanised countries in Southeast Asia, and the increasing concentration of population and assets, together with an equatorial climate and the presence of two monsoon seasons, make flooding the most expensive natural disaster in the country.
Monsoonal floods are among the severe threats, made worse by an increasing concentration of assets and population, climate change, and environmental degradation. Although monsoons very rarely impact the country directly, the months between May and November may be affected by heavy winds and storms.” Therefore, as a precautionary measure, Malaysians are advised to ensure that their vehicles, assets, and interests are adequately protected for natural calamities like a flood which is occurring on a more frequent basis due to the effects and fallout from the global climate crisis.
Most Malaysians are uninsured against flood
Only 4% of motor (comprehensive) policies and 30% of fire (material damage) policies have flood covers for 2021 (Year-To Q3 2021), according to statistics by Insurance Services Malaysia. Although it is encouraging to see an increasing trend in motorists choosing to get flood cover from 1% in 2017 to 4% in 2021, the number of flood covers under motor (comprehensive) policy is still very low. The purchase of flood cover under fire (material damage) policies has remained flat at 30% from 2017 to 2021.
Flood coverage is available
All PIAM member companies are currently offering an extension of flood coverage under the motor and fire policies, subject to an additional premium. If you have an existing motor or fire policy, you may have the option to include flood coverage, subject to an additional premium and at the individual insurer’s underwriting discretion.
How much does peace of mind cost?
As flood is an optional cover under the standard fire and comprehensive motor policies, consumers are advised to purchase or extend their insurance coverage to include Special Perils extension (which covers flood).
Generally, the premium for an extension of flood cover for motorcycle non-tariff policy is available from as low as RM10 per annum. As an illustration, based on three different types of car models (on non-tariff motor
products), the additional flood cover premiums payable range from approximately 14 sen to RM1.78 per day.
Flood cover is accessible
You are advised to review your policy to check on its scope of coverage. Your agent, broker, or insurance company are more than willing to advise and help you should there be further inquiries regarding insurance coverage against floods or any natural disasters.
Flood risk in Malaysia is a direct impact of the Global Climate Crisis According to Dr. Jessie Guo, Senior Economist, Swiss Re Institute in a recent PIAM webinar for its members on the Climate Emergency, Malaysia is ranked 47th out of 48 countries in the Climate Economic Index4, that is in terms of vulnerability to the climate change. Climate change will have an impact on the Malaysian insurance sector, with an estimated loss from fluvial and coastal floods increasing by 15-65% by 20505.
