Insurance coverage for special perils has been a major talking point following the devastating floods that hit parts of the Klang Valley and Pahang last month. If you’re worried that the renewed interest in obtaining additional protection for cars and motorcycles will drive prices up, don’t worry, as the General Insurance Association of Malaysia (PIAM) has assured customers that premiums will remain under control.

According to a Bernama report, the cooperation’s board of directors said the demand for insurance and takaful coverage to protect against floods and other natural disasters is currently very low due to a lack of awareness, adding that the increased demand will actually cause prices to drop.

“More people opting to get coverage will result in lower premiums due to competition among insurance companies offering more attractive packages,” said board member Zainudin Ishak in a webinar jointly organised by the Financial Education Network, PIAM, and the Malaysian Takaful Association today.

He added that floods will continue to happen as a result of climate change and infrastructure development bottlenecks. “Hence takaful or insurance coverage for floods is important, no matter where we live, be it on high- or low-lying areas because there will be loss of properties and other unexpected losses after the floods. If we live on higher ground, the rise in water levels may not affect us, but our properties like cars and motorcycles may be impacted.”

Zainudin, who is also the president and CEO of Malaysian Re, urged the public to the government’s constraints in providing aid in times of flooding, as there will likely be many victims in need of attention and support. “Property losses from flooding are not small and can run into billions of ringgit,” he said.

He added that the cost of vehicle repairs as a result of the 2021 floods was estimated by the insurance industry at RM1.3 billion, of which less than five per cent was covered by special perils insurance. “So if we do not protect ourselves against floods, there’s no chance for us to make claims…we have to bear the full brunt of the losses ourselves. It’s better for us to take the opportunity to have coverage to safeguard our future,” Zainudin said.