Turbulent times: Extreme weather is taking a growing financial and human toll, especially during the northeast monsoon. — File pic
GEORGE TOWN: Storms, floods and fires are common perils in Penang these days, and many people are not adequately protected against the costs.
General Insurance Association of Malaysia chief executive officer Chua Kim Soon said extreme weather is taking a growing financial and human toll, especially during the northeast monsoon that brings prolonged rain and flash floods.
“Many Malaysians still assume that their motor or fire insurance automatically covers floods.
“In reality, most standard policies exclude natural disasters unless they are specifically extended to do so.
“There are extensions available under fire policies to cover losses caused by floods, storms, landslides, typhoons and other natural events.
“Despite the modest additional premium, it is an important upgrade that policyholders should consider,” he said when met at the Financial Literacy Carnival held at Queensbay Mall in Bayan Lepas on Saturday.
Penang, like many other states, is bracing for the northeast monsoon that began on Nov 13 amid recent unpredictable rainfall and rising disaster risks.
The state Fire and Rescue Department has identified 256 flood-prone areas and six landslide hotspots across the state.
Chua said statistics showed that in December 2021, floods caused economic losses of between RM5.3bil and RM6.5bil, but insurers covered only 20% to 30% of the total.
He cautioned that the risk is on the rise, pointing out that Penang has recently faced floods in previously unaffected areas.
“Current take-up remains low, with only 12% of motor policies and 30% of fire policies having flood or ‘special perils’ protection’.”
“In Penang, motor flood-cover take-up has increased to 9.2% in 2024, but significant protection gaps remain.
“Flood-related motor claims, while infrequent, are very costly, averaging RM40,000 to RM50,000 per claim over the past three years.
“Flash floods in 2023 pushed Penang’s fire loss ratio to 18.6%, highlighting how localised floods can create sudden spikes in losses.
“Greater risk awareness is needed, especially in northern states where monsoon impacts are increasing,” he said.
For homes and businesses, Chua said Penang’s flood take-up under fire insurance stood at 27.4%, slightly below the national average of 28.9%.
“Check the type of insurance you have, as homeowner insurance covers the building, while homeholder insurance covers the contents.
“You also need to ensure your vehicle is covered against such perils,” he added.
Regardless of whether one is from the B40 or M40 community, protecting the home should include safeguarding household items as well, said Chua.
“The B40 community especially works hard to afford these items, and losing them in a disaster can set them back significantly.”
Chua also said Penang has seen a rise in road accidents.
“In 2024, Penang recorded 23,534 road accidents in the first five months alone, resulting in 167 fatalities, most of whom were motorcyclists.
“Penang’s dense traffic environment and high motorcycle usage contribute to this trend, making it essential to ensure adequate protection.
“When insured, the risk is transferred to the insurer. There are various factors to consider, including medical expenses, loss of income for self-employed individuals, temporary disablement and permanent injury.
“While no one likes to think of these possibilities, it is best to be prepared,” he said.
