Heavy rains in this country have raised concerns among motorists of the risks of their vehicles being submerged in flood water. Despite having to take precautions such as avoiding parking their vehicles in the lower parking levels which are susceptible to floods and avoiding the areas prone to flooding during heavy rains, vehicle owners still face the risk of rising flood waters. It may be worthwhile to ascertain if our motor insurance policies have coverage for claims for flood-related damages.
In general, comprehensive car insurance policy provides compensation for damage or loss to the vehicle due to accidental fire, theft or an accident. However, damage caused by floods considered as natural disasters and damage as a result of flood are not listed as a risk covered under motor insurance policy. Among the damage or loss caused by floods that is not covered are:
• damage to a vehicle submerged in flood
• loss of vehicle due to drift during floods
• fire and explosion due to flood water entered the vehicle
In addition to floods, other natural disasters are not covered including:
• earthquake and its string of situations such as tidal waves / tsunamis,
• landslides (and the sequence such as gas explosions or fires as a results of electrical interference due to landslides), and
• storm (and the sequence such as damage caused by vehicles struck by lightning during a storm).
However, vehicle owners can purchase additional protection against damage or loss caused by floods by extending their coverage when purchasing their motor insurance policies. This coverage also applies to other natural disaster risks such as earthquakes, landslides and thunderstorms.
This additional protection will cost vehicle owners an additional premium of 0.5% of the sum insured. For example, if the sum insured is RM50,000, vehicle owners will be charged an additional premium of RM250. Vehicle owners can also compute the estimated total premium for additional coverage for floods, using the premium calculator available at this website.