As motorists in Penang and Kedah counted the painful cost of having their cars overhauled after the floods, there is now a need for more awareness of flood coverage as a rider (add-on) to the usual comprehensive car insurance. Although instances of vehicles being caught in such an occurrence are becoming more and more frequent, few people are insured against it.
Less than one out of 100 vehicle owners five years ago would purchase flood coverage for their vehicles. Since then, insurers have recorded an increase, to three or four policies per 100 owners.
Customer have to pay 0.5% of the value of the car. So if the car is valued at RM100,000, the usual premium for the comprehensive coverage is RM1,800. The 0.5% is another RM500, which to the car owner, is more than 20% of the basic premium, so people tend to skip that.
With the local insurance industry’s liberalisation earlier this year, companies have since issued more affordable products which help cover flood damage, especially as more and more incidents crop-up.
Some insurers have offer with a more specific coverage for flood and storm damage, which includes cars being damaged by trees due to the storm, at 0.25%, to help better protect consumers.
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