PIAM - Covid Not Covered

Medical and health insurance policies issued by general insurance companies do not provide coverage for pandemics such as Covid-19, the General Insurance Association of Malaysia (PIAM) said today.

The reason for this is that pandemics have been assumed as a rare event and thus, the absence of wide coverage under most policies. Pandemics are generally a risk with high exposure. As insurance premiums will commensurate with the risk exposure, insurance premiums will naturally be higher if a pandemic is covered. Higher premium may affect consumers’ affordability and accessibility to essential medical health insurance protection,” PIAM said.

PIAM noted that while the probability and frequency of a pandemic are low, its severity is high. If it occurs, a pandemic will affect a large section of the population thus affecting the risk-pooling concept of an insurance company. If pandemic is required to be covered, more data will be needed to readily and accurately predict its cost and impact. Primarily, pandemics are not priced into medical insurance premium to make them more affordable to consumers.