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Facing the Flood

Protecting Your Valuables from the Malaysian Monsoon
December 2018

Reading time: 2 minutes

The northeast monsoon, typically beginning in November through to March, brings major rainfall to the Malaysian Peninsular especially in the East Coast states. In a recent media report, Deputy Prime Minister, Datuk Seri Dr Wan Azizah Wan Ismail said the government had approved RM1.77 million for operations by the state Disaster Management Committee during the flood season, in view of the flood which hits the East Coast states yearly. She also added that the Government had spent about RM8.117 million on aid funds for flood victims in the East Coast states until last October 20181.

Whilst Malaysian East Coast are more flood-prone, there have been incidents where the unprecedented occur, such as last year’s flood in Penang where heavy rainfall poured for 15 hours and caused water levels to rise as much as 10 feet to 12 feet in certain parts of the city2.

Fast forward to 2018, the city of Kuching in East Malaysia was also not spared from the aftermath of flood just two weeks ago where many parts of the city including the Sarawak General Hospital, Padang Merdeka and low-lying residential areas, were badly affected by the flash floods which occurred during a downpour3.

Due to these occurrences year after year, it is evident that flash floods during the year-end monsoon in Malaysia is no longer limited to certain geographical quarters. With high probability of floods during this period of time, we are exposed to many safety hazards and other risks. Naturally, there have been many flood safety and preparedness tips and checklists shared with the public, which provide helpful guidelines on the do’s and don’ts during a flood in light of our own personal safety.

Whilst it is important to mitigate risks to protect ourselves in the event of a flood, we should also take steps to protect our valuables from the devastating effects of a flood.

Mr. Teh Yau Kun, Head of Claims at Berjaya Sompo Insurance highlighted that many people do not take insurance for flood or extend their coverage to cover flood for their properties, vehicles or belongings.

“Insuring your highly valued assets against flood and other perils is crucial. Purchasing a Homeowner/ Householder (HOHH) policy will cover your house and the contents within the home. The HOHH policy covers damages caused by fire and lightning and other extended perils which include flood. Similarly, with additional premium, you can arrange for a Fire Policy with the extension of the flood peril to cover your businesses and other assets. As for your vehicles, you can add the convulsion nature extension in your Motor Policy to cover your vehicle against damages caused by natural disasters which include floods, storms and landslides.”



For the HOHH and Fire Policy, you can arrange for a Reinstatement Value Clause. With the Reinstatement Value Clause, the basis of settlement or claims is on new for old, i.e. there is no deduction for wear and tear depreciation. However, it is important for the Sum Insured to be adequately arranged on a new replacement basis to ensure that policyholders will enjoy the said benefit. Otherwise, the policyholder will be required to bear the rateable portion for the damage/loss, if the item was found to be underinsured.

Therefore, when considering insurance for flood coverage, consumers should bear in mind not only the costs to cover the value of the properties, vehicles and belongings, but also costs which may incur for the reconstruction, repair and purchasing of new items. An inadequate sum insured will require you to top up out of your own pocket and this could disrupt your financial flows and major life events.

In conclusion, it is essential that you understand your risk exposure levels which will help you to determine the type of policies and coverage extensions that best serve your current needs and those of your loved ones. Prevent yourself from becoming a national statistic and find out how you can protect your valuables against flood and other perils below:

Home Insurance 
SOMPO Motor
Fire Insurance

You can also speak to our dedicated agents nationwide or call our Customer Service Centre at 1 800 889 933 for more information.
 
1 New Straits Times. 2019 Budget: Govt has not ignored East Coast states, says DPM.
https://www.nst.com.my/news/nation/2018/11/428279/2019-budget-govt-has-not-ignored-east-coast-states-says-dpm
2 http://www.theedgemarkets.com/article/state-nation-penang-floods-likely-have-minimal-disruption-economic-activities
3 The Star Online. https://www.thestar.com.my/metro/metro-news/2018/11/24/urgent-disbursements-needed-to-tackle-flood-woes/