With the Northeast Monsoon expected to start today, vehicle owners may be facing a costly risk without realising it. Only 13% of motor vehicles in the country have flood cover, according to the General Insurance Association of Malaysia (PIAM). This means the remaining 87% of owners could have to pay for flood-related repairs out of their own pockets.
Speaking to us at Karnival Celik Kewangan (KCK) Selangor at Central i-City in Shah Alam on 23 October 2026, PIAM chief executive officer Chua Kim Soon said many vehicle owners only check their insurance policies after their vehicles have already been damaged.
Comprehensive Car Insurance Often Doesn’t Cover Floods
According to Chua, only 7% to 7.5% of vehicles in Kelantan and Terengganu have flood cover. The rate is similarly low in East Malaysia, at 7.5%, covering Sabah, Sarawak, and Labuan.
A common mistake, Chua explained, is thinking that a comprehensive car insurance policy automatically covers every type of damage. In reality, comprehensive policies don’t cover everything, and flood damage usually isn’t covered unless you buy extra protection.
This extra protection is commonly known as Special Perils cover. Depending on the policy, it can protect your vehicle against natural disasters such as floods, windstorms, typhoons, cyclones, earthquakes, and volcanic eruptions. Damage caused by falling trees during storms may also be covered.
Going without this protection can be expensive. Chua shared that his own family once had to spend about RM6,000 to RM7,000 repairing his wife’s car after it was flooded. The vehicle didn’t have flood cover, leaving the family to pay for the repairs themselves.
As Chua pointed out, saving money by cutting insurance coverage may cost you more when an expensive asset such as a car is damaged. However, the right level of protection depends on your needs, the risks you face, and the terms of your policy.
Home Insurance Policies Differ On Flood Cover
The same principle applies to your home. Having fire insurance doesn’t always mean you’re protected against floods.
A basic fire insurance policy usually covers fire, lightning, and domestic explosions such as those caused by LPG tanks. Flood damage is not covered unless you buy an add-on.
Homeowners in areas that often flood should review their home insurance and check whether flood damage is included. Insurance for the building and insurance for the belongings inside it are separate policies.
If your home insurance came with your housing loan, Chua recommends asking your bank which type of policy was bought on your behalf. You should also confirm whether flood damage is covered and whether your household belongings are insured separately.
Before buying or renewing a policy, compare home insurance plans and check what the policy covers instead of relying on the policy name alone.
Budget 2027 Includes RM100 Million For Flood Prevention
Under Budget 2027, the government has set aside RM100 million for retention ponds and river maintenance. The measures are meant to help manage floodwater, including the risk of flash floods in the Klang Valley. Assistance for home repairs for disaster victims has also increased from RM5,000 to RM10,000.
Chua was glad to see the focus on retention ponds, explaining that floodwater needs somewhere to go. He also noted that floods have become harder to predict, with development and more crowded cities adding to the risk of flash floods.
Residents can help too. Keeping nearby drains clear can help water flow more freely, while having enough insurance can ease the cost if flooding still occurs.
PIAM had also sent proposals to the government ahead of Budget 2027, including tax relief for certain types of insurance coverage and a review of the sales and service tax (SST) on basic cover. These proposals weren’t accepted in this round, although the association plans to keep talking to government agencies.
According to Chua, the decision is unlikely to have much effect on premiums, as insurers usually set prices based on past claims for each risk.
E-Hailing And P-Hailing Workers Face Added Risks On The Road
For people who depend on their vehicles for work, flood cover matters more. E-hailing drivers and p-hailing riders spend a lot of time on the road, which raises their risk from sudden weather changes and flash floods.
From 2027, the government and Grab will pay for a RM160 million package together for e-hailing and p-hailing workers. The package helps pay for vehicle maintenance and insurance.
Chua was glad about the package and encouraged drivers and riders to consider adding flood cover to their policies. They’re on the road almost all the time, and flash floods in cities can happen suddenly, he said.
So workers should check whether their policies give enough protection and whether the cover suits using the vehicle for work.
Steps To Take If Floodwater Damages Your Car Or Home
If your property is affected by flooding, put your safety first before you record any damage. Once it’s safe to do so, take photographs of the affected areas and your damaged belongings. These records may be useful when making an insurance claim.
Chua also recommends preparing an emergency bag containing spare clothes and important documents, like how people in Japan prepare for emergencies. Keeping digital copies of important documents can also help if physical copies are lost or damaged.
Once you’re safe, contact your insurer as soon as possible to find out how to claim and which documents you need. If you don’t know which company provides your coverage, PIAM may be able to help connect you with its member insurers.
The association previously helped homeowners find out who their insurers were following the gas pipeline fire in Putra Heights on 1 April 2025. PIAM’s website lists its member companies. You can also call +603-2274 7399 or email pic@piam.org.my.
Remember that whether your claim is approved depends on your policy’s coverage, what it doesn’t cover, and conditions. Having photographs of the damage doesn’t guarantee a successful claim, so contact your insurer for guidance.
Save your insurer’s contact details and policy numbers on your phone so you can find them quickly in an emergency.
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This article is for general information only and is not financial advice. Insurance coverage, premiums, what’s not covered, and policy terms vary by insurer. Check the relevant policy wording and consult your insurer before making a decision.
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