26 JANUARY, 2025

Malaysia's dramatic monsoon floods - How insurance helps

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By the end of November 2024 Malaysia had already seen severe rainfall from the Northeast Monsoon, with serious flooding in Kelantan, Terengganu, Kedah, Pahang, Negeri Sembilan, Johor, Perak, Melaka and Perlis. By early January we were still seeing flooding, with experts predicting we'd have heavy rainfall right through to March. So what can insurance do to help people and businesses survive the floods with their finances intact, making the world a better place? Let's explore.

The current Monsoon season

The east coast of Kelantan, Terengganu, Pahang, and Johor have seen particularly widespread flooding this season, displacing people and disrupting daily life. METMalaysia says we'll have at least five more periods of heavy rain by the end of the season, causing more substantial damage to homes, lives and infrastructure like roads, airports and railway lines. It has been so bad that intercity connections have failed, affecting efforts to rescue people. Landslides have made things even worse.

The Ministry of Agriculture and Food Security says many rice and paddy fields have been destroyed with a loss of CHF 1.79 million and the floods in Terengganu, Kelantan, and Kedah extended to 268 square kilometres. In Kedah alone the rising waters impacted 1.3 million of us, damaging crops and causing chaos. The floods carried on into January, with Peninsular Malaysia seeing more flooding and no sign of the rains slowing down. When the waters finally receded there was a terrible mess to clear up before life could return to normal.

Malaysia's 2024 Monsoon floods were worse than 2014

As reported by Business Today Malaysia on 1st December 2024, the flood situation across Malaysia, especially in Kelantan and Terengganu, was already worse than 2014's disastrous flooding. Unusually high tides in the South China Sea and the Straits of Melaka, predicted to peak during the Monsoon season, caused extra worry. On the bright side Malaysia's MET experts were slightly more hopeful, suggesting that the season's rainfall surges might actually recede.

More than 82,000 experts were mobilised to support victims of the floods and warnings were issued to people living in low-lying places to evacuate to safety early. All political parties were asked to forget their differences and work together to help the victims. So how does insurance help people and businesses survive the floods?

About flood insurance for people and businesses

A basic home insurance policy usually covers fire, lightning, and explosions. Flooding isn't included. On the other hand if you've taken out a mortgage to buy your home the lender will want to protect their investment so they may include flooding in the policy they offer you. If you're not sure whether you have flood cover for your home, take a look at your policy or contact your insurance company or intermediary.

A basic home fire policy covers the value of the building, not the contents. A houseowner policy is more comprehensive, including coverage for severe weather damage, floods, fire, burst pipes and more. But again, it doesn't cover the contents of your home. A householder policy includes contents cover for fire, floods, natural disasters and more. So, to insure your home against floods you need a houseowner policy and a householder policy. Luckily most insurance companies combine the two, making life a lot easier.

The cost depends on the risk. If you live in a place that floods frequently it'll cost you more than if you live in a place that rarely floods. People living in places that flood all the time might find it hard to buy a policy because the risk is too great for the insurers to cover and even if they did, it would cost too much.

Because 9% of Malaysia is considered as flood-prone, it's just as important for businesses of every size and type to insure against flooding. Flood insurance isn't available as an independent takaful or insurance policy, but you can buy it as an add-on to basic and comprehensive policies.

How about vehicles? A basic car insurance policy covers you for loss or damage from accidents, fires and theft, third-party death or bodily injury, and third-party property damage or loss. Flood-related damage is an extra called 'special peril coverage', protecting your finances from vehicle damage by floods, storms, typhoons, landslides and other 'acts of nature'.

Can we help you find the flood coverage you need?

We'll save you time hassle and heartache by finding you the perfect flood add-on for your home, vehicle and business.