With incessant heavy rain affecting various states in Malaysia, authorities urge citizens to take immediate steps to safeguard their properties and belongings against potential floods. Addressing the recurrent challenge of floods, especially during the monsoon season, officials stress the importance of proactive measures for a quicker recovery post-flood.
The 2021 Special Report on the Impact of Floods in Malaysia revealed losses of RM6.1 billion due to floods in late December 2021 and early January 2022. Recent flash floods have further intensified concerns, prompting the need for enhanced awareness regarding flood exposure and protection, considering climate change and evolving topography.
Despite increased awareness, flood coverage uptake in comprehensive motor insurance saw a rise from 12% to 14% in H1 2023. Yet, there remains a need to educate the public further about flood risks. Fire insurance’s flood take-up rate also slightly increased to 33% in H1 2023, compared to 31% in the full year 2022.
Accessible and Affordable Flood Coverage
All PIAM member companies offer flood coverage extensions under comprehensive motor and fire policies, subject to additional premiums and individual underwriting discretion. Authorities recommend policyholders thoroughly review policies and consult intermediaries for detailed information on coverage, terms, and conditions, which may vary among insurers.
Contrary to common perception, flood coverage is more affordable than anticipated. Additional premiums for flood extension coverage, as illustrated for various vehicle types, range from RM0.07 to RM1.47 per day. The standard tariff policy’s rate for flood extension coverage is 0.086%, an affordable sum considering the protection it offers against flood-related losses.
Car Model Proton Saga 1332CC Toyota Camry 1998CC Mercedez Benz AvantGarde 1991CC Specifications NCD: 45% Year Make: 2015 Sum Insured: RM13,000 With Special Perils NCD: 45% Year Make: 2015 Sum Insured: RM64,000 With Special Perils NCD: 45% Year Make: 2015 Sum Insured: RM107,000 With Special Perils Premium Approx. RM180–RM390 p.a. Approx. RM600–RM1,300 p.a. Approx. RM920–RM1,960 p.a. Flood Cover Premium (add on) Approx. RM25–RM65 p.a. Approx. RM130 – RM320 p.a. Approx. RM200 – RM535 p.a. Flood Cover Premium (add on p/day) Approx. RM0.07–RM0.18 p/day Approx. RM0.36–RM0.88 p/day Approx. RM0.55–RM1.47 p/day
Flood Risk in Malaysia and Recommendations
A report by Malaysian Re on Malaysian Insurance Highlights 2022 notes a changing monsoon pattern and an increase in devastating rainfalls, potentially linked to climate change. Authorities strongly recommend Malaysians take proactive measures to safeguard their assets, review existing insurance coverage, and ensure it aligns with their individual needs amidst the growing risks of floods, natural disasters, and fire damage.
- Source: Data from ISM @ 11/10/2023. Figures are in UW Year basis and data is for General Insurance and MMIP only.
- Source: Data from ISM @ 11/10/2023. Figures are in UW Year basis and data is for General Insurance companies.
- Source: Malaysian Re on Malaysian Insurance Highlights 2022.
