Stronger Storms Ahead: How Malaysians Can Prepare for the Monsoon
The recent Kuala Langat tornado, which damaged homes and schools within minutes, was a stark reminder of Malaysia’s increasingly unpredictable weather.
As the northeast monsoon approaches, the risks are mounting. According to the Special Report on Impact of Floods in Malaysia 2024 by the Department of Statistics Malaysia (DOSM), total flood-related losses reached RM933.4 million in 2024, up from RM755.4 million the previous year. Housing losses alone more than doubled to RM372.2 million, while agriculture and public infrastructure accounted for nearly RM488 million combined.
Despite these growing risks, PIAM Yearbook 2024 data shows that more than half of Malaysian households remain uninsured against flood insurance in Malaysia. Here’s what Malaysians can do to strengthen their protection this monsoon.
Why Flood Insurance in Malaysia Matters More Than Ever
There are extensions available under the fire policy to cover losses caused by floods, storms, landslides, typhoons, and other natural events. Despite the modest additional premium, it remains one of the most important upgrades a policyholder can make.
For fire insurance, the added cost for flood cover can be as little as RM14 a month for a building insured for RM200,000. The growing frequency and scale of monsoon-related damage highlight why this extra layer of protection is now essential. Alternatively, consumers can also opt for Houseowner and/or Householder insurance policy commonly known as Home Insurance in the market which offers flood, storm, earthquake, etc protection as part of its standard coverage.
The message is clear: as extreme weather intensifies, relying on basic coverage is no longer enough. Malaysians should review their policies now to ensure they are protected against today’s climate realities.
Protecting Your Vehicle
Flood-related motor losses are among the most common insurance claims during the monsoon season in Malaysia. Based on data as of Q4 2024 from Insurance Services Malaysia Berhad, 89 vehicle flood claims incurred in 2024, totalling more than RM 3 million in incurred claims amount.
This pattern reveals a persistent gap: many motorists are unaware that standard motor insurance does not cover flood damage. Vehicles damaged by flash floods or falling debris during storms can only be compensated if the comprehensive motor policy includes a Special Perils extension.
This add-on covers damage caused by floods, storms, landslides and other natural events. For modern vehicles equipped with advanced electronics, even partial submersion can result in a total loss. Without this coverage, repair can cost up to tens of thousands for newer models.
Drivers can verify whether they have Special Perils coverage by checking the “Additional Coverage” section of their policy schedule. They can also seek assistance from their agents and/or insurers. The extension typically costs less than 0.5% of the insured value which is around RM42 per month for a vehicle costing RM100,000.
PIAM encourages motorists, to check their policy coverage, shop around for the best coverage based on their needs or speak to their insurer or agent for further assistance. For practical further guidance, visit the PIAM Motor Insurance Guide.
Safeguarding Your Home
Housing losses were the largest single category of flood damage in 2024, exceeding RM370 million, according to national data. Yet, according to the PIAM Yearbook 2024 only 3.87 million of Malaysia’s 9.1 million households held a home-insurance policy in 2023–24 and even fewer had flood extensions.
This gap reflects a broader protection issue: many homeowners still rely on basic fire policies that only cover losses due to fire, lightning or domestic gas explosions, while perils such as floods or storms require an additional extension.
A comprehensive policy—Houseowner for your building and Householder for your contents—provides essential flood insurance in Malaysia, ensuring families can rebuild and recover without long-term financial strain.
NOTE TO EDITOR MAKE THIS SECTION A PULL OUT QUOTE:
- Houseowner Policy – covers the building structure (walls, roof, fixtures).
- Householder Policy – covers household contents (furniture, appliances, personal belongings).
It’s important to note that standard Houseowner and Householder policies exclude landslide and landslip. Homeowners in hilly or high-risk areas should consider purchasing an extension for these perils to ensure comprehensive protection.
Another common issue is underinsurance — when homes are insured for market value instead of rebuilding cost. PIAM’s Building Cost Calculator (BCC) helps homeowners estimate an appropriate insured sum for simple residential properties and avoid shortfalls during claims. A well-structured policy ensures families can repair or rebuild without enduring long-term financial hardship.
Strengthening Business Resilience
For Malaysia’s small and medium-sized enterprises (SMEs), floods can cause severe disruption. PIAM recommends that businesses ensure their Commercial Property Insurance includes flood, storm and landslide protection, and consider Business Interruption Insurance (also known as Fire Consequential Loss). This coverage compensates for lost income and fixed expenses while operations recover.
Further information is available through PIAM’s SME Insurance Resources.
Protecting Health and Safety
Monsoon disasters have consequences beyond physical damage including personal bodily injuries or even death.
There are Personal Accident (PA) policy that provide lump-sum payouts for accidental injury or death including some coverage for medical expenses due to accidents arising from flood-related events.
Filing a Claim After a Disaster
Timely reporting and accurate documentation are crucial for efficient claims processing.
- Ensure safety first. Return only after authorities confirm the area is safe.
- Notify your insurer immediately. Contact your insurer or agent to initiate your claim.
- Document damage. Take clear photos and videos before cleanup.
- File a police report. Submit within 24 hours if required by your policy.
- Cooperate with the loss adjuster. Provide all supporting documents promptly.
PIAM continues to work with member insurers to streamline post-disaster processes and strengthen financial recovery across impacted communities.
Building Financial Resilience
Malaysia’s climate risks are evolving faster than public preparedness. As flood losses rise year on year, insurance remains the most effective financial safeguard against monsoon-related damage.
Through its General Insurance Dashboard, PIAM highlights the vital role of general insurance in providing security and resilience across the nation. The data includes the general insurance penetration rate among Malaysian households, drivers of insurance premiums, distribution channels and rising claims which impacts the industry’s underwriting performance.
The Association also collaborates with Bank Negara Malaysia and its members to improve claims efficiency and expand protection accessibility through initiatives like Perlindungan Tenang which provides simple and affordable insurance protection tailored for underserved segments, particularly the low-income group. Under the Perlindungan Tenang Voucher 3.0 programme, Sumbangan Tunai Rahmah (STR) recipients are eligible to receive a RM30 Perlindungan Tenang Voucher, which can be used to purchase microinsurance products such as Personal Accident from participating licensed general insurers. This initiative plays a key role in strengthening financial inclusion and ensuring basic protection is accessible to vulnerable communitiesAs the monsoon intensifies, Malaysians are urged to review their motor, home and business policies, ensure flood and storm coverage are included, and consult their insurer or agent for tailored guidance.
Review your policy today or speak with your insurer about flood and storm coverage options available through PIAM members. Visit www.piam.org.my.
Frequently Asked Questions
Q: Does my car insurance cover flood damage in Malaysia?
Most standard comprehensive motor policies do not cover floods. You need a Special Perils extension.
Q: How much does flood coverage for fire insurance cost in Malaysia?
Depending on your property value and location, flood extensions can cost as little as RM14 a month for a building insured at RM200,000
Q: What’s the difference between Houseowner and Householder insurance?
Houseowner covers the building structure; Householder covers personal belongings and contents.