Cover image via gannett-cdn.com
Dato' Seri Ahmad Shabery Cheek has proposed for the government to collaborate with insurance companies and create a flood insurance policy to better protect the welfare of the people
Image via null
In the US, the National Flood Insurance Program allows property owners to purchase insurance protection from the government against losses from flooding
The US [National Flood Insurance Program](https://www.fema.gov/media-library/assets/documents/272?id=1404) (NFIP) was created by the Congress of the United States in 1968. The programme allows property owners in participating communities to purchase insurance protection from the government against losses from flooding. Through nearly 90 private insurance companies, the NFIP was designed to provide an insurance alternative to meet the escalating costs of repairing damage to buildings and their contents caused by floods.
The NFIP protects two types of insurable property: the building and the contents of the building. Building policies start coverage at $20,000 and go up to $250,000 while content coverage starts at $8,000 and goes up to $100,000.
By April 2010, nearly 5.5 million homes in the United States were protected under the NFIP.
In Malaysia, MSIG reports that while most homeowners insure the building of their property, which covers damage from floods, a 2007 survey shows that only 5% have protection for the contents of their home
Image via null
Are your home and its content protected from flood damages?
Flood damage protection comes with most Houseowner and Householder Insurance. It is important to note that these are two separate policies that protect different parts of your home.
Most homeowner's insurance in Malaysia do have flood damage protection, however it is important to note that there are big differences between a Houseowner and Householder Policy as they protect different things.
**Houseowner Policy** provides coverage for the structure of the building and not the contents of your home. The damage can be caused by anything from floods to a vehicular accident.
**Householder Policy** protects only the contents of your home, such as your furniture or important documents. Most good householder policies include damages caused by flood.
Image via null
According to the General Insurance Association of Malaysia (PIAM), flood coverage does not include loss or damage caused by subsidence or landslip
Image via null
A Basic Fire Insurance is not sufficient as it provides basic coverage for the building and cover damage by fire, lightning and explosion only
Image via null
It is important to check if your property is covered by the Houseowner or the Householder Insurance to know how well are your assets protected should disaster strike
It is important to note that the protection for the building structure and the contents of your home are two separate policies. Be sure to check which policy you have. The General Insurance Association of Malaysia recommends buying both the Houseowner and Householder Policies for comprehensive cover for your property and its contents. Some insurance companies provide a combined coverage of both Homeowner and Householder Policy, which is sometimes called the Home Insurance Policy. The premium of this combined policy would be higher.
If you own a vehicle, you definitely have motor insurance, but is it enough to protect your vehicle after being damaged by floodwater?
Basic car insurance policy does not cover flood as it is listed as 'Special Perils', an additional protection against unexpected natural disasters
In Malaysia, motor insurance is compulsory before road tax can be purchased. There are three categories of insurance parties including Third Party, Third Party with Fire & Theft, and Comprehensive coverage. However, as the table from iMoney below depicts, car insurance policies only provide coverage for damage or loss to the vehicle due to accidental fire, theft or accident. Flooding is considered as a natural disaster and thus is not covered under the basic policy.
Image via null
Disasters that are listed under Special Perils include landslides, earthquakes, tsunamis and storms. According to Insurance Info, damage or loss caused by floods include:
– damage to a vehicle submerged in flood
– loss of vehicle due to drift during floods
– fire and explosion due to flood water entering the vehicle
Flood protection is an optional coverage and can be purchased with an additional premium of 0.5% of the sum insured
According to a 2012 figure released by General Insurance Association of Malaysia (PIAM), only 0.4% of motor insurance policyholders bought Special Peril cover benefit
Image via null
The Malaysian Reserve debated on whether insurance and takaful operaters should provide flood damage cover as a standard coverage in motor policies
On the other hand, RinggitPlus opines that flood coverage should no longer be considered in the same category as typhoons, earthquakes and volcanic eruptions as it happens so often in Malaysia. It is time for car insurers to catch up with home insurance policies, the writer said.
Image via null
