95% Car Not Insured Due To Flood

The Federation of Malaysian Consumers Associations (FOMCA) are asking insurance companies to consider offering 50% rebates on vehicle repair costs incurred due to floods as a corporate social responsibility (CSR) initiative to aid victims.

FOMCA President claimed that around 95% of Malaysian vehicle owners won’t be compensated for repairs. This is because their insurance policies do not cover natural disasters like floods. Most Malaysians are not aware that their insurance providers even offered such coverage as companies failed to advise buyers about the product before proceeding with their purchases.

FOMCA said that they would be sending a request to Bank Negara and the government to get them to tell insurance companies to promote natural disaster insurance coverage to the public. FOMCA is also of the opinion that Malaysians have undermined the severity of natural disasters such as floods that are impacting the nation.

Although there are insurance policies that include natural disasters like floods as part of a comprehensive, all-in-one package, there are those that don’t and would charge extra for it to be included. Most people don’t subscribe to insurance policies that include natural disaster coverage because of these additional costs. The standard rate for natural disaster coverage for your homes and property costs an additional 0.086% (for floods) and 0.081% (for landslides) of the total coverage amount of an individual’s insurance package. While for vehicle insurance, premium holders would usually pay between 0.2% to 0.25% of the total coverage amount.

A report counted an estimated 50,000 cars were left damaged and broken down across the country due to the floods. The number of stalled vehicles were especially high in Selangor and Pahang. It would cost vehicle owners between RM1,700 to RM54,000 to repair the damage done by floods depending on the size of the vehicle and the extent of the damage.

Most owners would also need to continue on paying for their vehicle loans as it remains immobile and unusable while being repaired. This could take a period of between three to six months to complete.

General Insurance Association of Malaysia (PIAM) and the Malaysian Takaful Association (MTA) urged policyholders to have another look at their insurance policies to ensure that they are covered against floods and advised insurance companies to expedite the payments to victims.

Flood victims are also advised to make a police report on the damages done to their properties and vehicles as soon as possible and snap as many pictures of the damages as they can.