PIAM urges property and vehicle owners to check their flood insurance coverage, warning that uninsured flood damage could result in substantial repair costs.
KUALA LUMPUR: Only 28% to 30% of fire and motor insurance policies in Malaysia include flood extension coverage, leaving most policyholders exposed to potentially substantial repair and replacement costs, says the General Insurance Association of Malaysia (PIAM).
PIAM chief executive officer Chua Kim Soon said the low take-up rate was concerning, as homeowners and vehicle owners without the additional protection would have to bear the financial burden of repairing or replacing flood-damaged property.
“This is a very high exposure to Malaysians because if they are not protected against flood and if any loss happens, it is going to cost them money and it is going to be out of pocket.
“This is the kind of situation we don’t want Malaysians to face,” he told reporters after PIAM’s Monsoon Readiness Media Roundtable here today.
Chua urged Malaysians to review their home and motor insurance policies to ensure they had adequate flood protection.
He also advised property owners in hillside or sloping areas to check whether their policies included additional coverage for subsidence and landslides.
He said flood extension coverage remained relatively affordable, with the additional premium for a house valued at RM100,000 costing less than RM90.
For motor vehicles valued at RM100,000, the additional premium ranged from RM150 to RM500, depending on the coverage selected.
“Because the insurance premium itself is not expensive,” he said, urging policyholders who were uncertain about their protection to seek clarification from their insurance agents or companies.
Asked whether flood protection should be made compulsory, Chua said the industry preferred to retain it as an optional extension, allowing policyholders to assess their individual exposure to risk.
He said the decision should take into account factors such as whether a property was located in a flood-prone area and the policyholder’s willingness to take on the risk.
Chua also ruled out making flood coverage available only during the monsoon season, saying insurance could not be purchased selectively when the risk of flooding was at its highest.
“If you are selecting only where the highest exposure is, then it would not be possible.
“If you ask me and you push the insurance, then the premium will be equivalent to the value of the property,” he said.
He further advised prospective homebuyers to conduct due diligence on flood risks before purchasing a property, particularly in locations with a history of flooding.
