PETALING JAYA: The government should help low income households (B40) to pay for flood insurance to protect them against heavy losses in such disasters.
This can be done through a national flood insurance scheme under a public-private partnership, suggested General Insurance Association of Malaysia (Piam) board of directors member Zainudin Ishak.
“The government can use a portion of the funds for flood financial relief to pay for the flood insurance coverage for B40 families. The premium will be low and insurance companies will not be making money as this will be a not-for-profit initiative,” he said.
“We will just cover the cost and management expenses to administer such a scheme,” added Zainudin when contacted on Tuesday (March 7).
Zainudin also urged those who have fire and flood insurance for homes to extend the coverage to cover the content of their houses as well.
“As for flood covers under motor insurance for vehicles like cars, the penetration rate is still low at around 5% to 6%,” he said, urging more to take up such facilities.
Recently, thousands of people were forced to evacuate their homes after floods hit six states in Malaysia namely, Johor, Pahang, Melaka, Selangor, Negri Sembilan and Sarawak.
Calls to have a national flood insurance scheme was also made by former Klang MP Charles Santiago.
He said such a scheme should be made available in all states with subsidised rates for B40 households.
“There is no time to wait anymore.The tragic loss of four lives, highlights the seriousness of the situation following the recent floods.
“While the threat of climate change looms large, the immediate focus must be on addressing the aftermath of these floods and providing relief to those affected in a sustainable manner,” he said in a statement on Saturday (March 4).
He said that such a move is important, especially since these floods disproportionately affect the B40 and middle income (M40) groups, pushing them into poverty.
As such, the national flood insurance scheme must be implemented to serve as a social safety net for the vulnerable, he added.
He said other countries have come up with a similar scheme such as the United Kingdom’s “Flood Re Scheme”, a joint initiative by the government and the insurance industry there.
“Our Asean neighbours like the Philippines and Thailand have followed suit in offering public flood insurance schemes where the premium is in proportion to the risk of flooding in a particular area.
“Schemes such as these increase affordability and accessibility to a much wider population,” he added.
