This is as most people tend to remove the coverage after a short period of time as they don’t feel the need for it
by ANIS HAZIM / Pic by MUHD AMIN NAHARUL
ONLY 4% of the people nationwide purchased flood insurance coverage, the General Insurance Association of Malaysia (PIAM) said.
Its chairman Anthony Lee said flood or natural disaster insurance coverage saw a downtrend as people tend to remove the coverage after a short period of time.
“Five years ago, the cost of flood coverage has come down by more than half. Statistically, when people buy flood coverage, they do not experience a flood in the next year on renewal — they will remove it,” Lee said after the PIAM-MTA 2022 Nationwide Road Safety Campaign launch yesterday.
Lee also noted that motorists were underinsured from natural disasters as evident from the recent flash floods.
He is deliberating a proposal to make it compulsory for motorists to have insurance coverage.
“We are looking at things we might consider — one thought we have been asked to look at if we can make it compulsory, for the whole, for everyone, and maybe that is a good thing,” he said.
He also said that awareness is important when it comes to insurance coverage.
“I think awareness is the issue, and people need to learn and understand. So, we have to change the mindset,” he said.
Last month, PIAM said it estimates payout from claims due to the devastating floods that swept across the peninsula could cost up to RM3 billion.
Meanwhile, Malaysian Takaful Association (MTA) deputy chairman Mohamed Sabri Ramli said many people do not understand the nature of flood insurance coverage.
“People will remove the flood insurance after a year. But they need to understand that natural disasters are unpredictable.
“Insurance is not about what you predict to happen and you buy the insurance. Insurance is to cover the unforeseeable loss, so it can happen over a period of 30 years,” Mohamed Sabri said after the launch ceremony.
PIAM together with MTA had previously advised all certificate holders to review their policy coverage and ensure that their properties are insured against floods.
Policyholders should contact their respective intermediaries, insurers or takaful operators for further advice and clarification, they said.
“PIAM and MTA wish to assure all policy or certificate holders that their members stand ready to render assistance to all policy or certificate holders affected by flood in minimising the financial impact through expedited claims process and special considerations on a case-to-case basis.
Meanwhile, the associations launched the road safety campaign in an effort to reduce road accidents and fatalities, as well as to foster greater road safety awareness among road users.
With the campaign, both PIAM and MTA hope that road accidents and fatalities will be significantly reduced amid the nation’s attention and focus on battling the Covid-19 pandemic for the past two years.
“Unfortunately, the younger motorbike riders and too many of the next generation Malaysians are dying on the roads. So, it is cultural and has been there for so long,” Lee said further.
Citing police’s statistics, there were 6,167 fatalities due to road accidents in 2019 which amount to about 17 fatalities per day due to road accidents.