Millions of M’sian homes uninsured and vulnerable

PETALING JAYA: Day in, day out, stories appear about fires, flash floods or other catastrophes caused by extreme weather.

Yet, few Malaysian homeowners seemed inclined to protect their homes against such calamities.

“More than 50% of Malaysian households remain uninsured against structural damage caused by fire, floods or severe weather conditions,” said the General Insurance Association of Malaysia (PIAM).

According to its data, the take-up rate for fire and home insurance policies has remained at around 43% for the past two years.

In 2023, only 3.89 million homes were insured out of the 8.88 million households.

Last year, of the 9.1 million households, only 3.87 million had a fire and home insurance policy.

As climate events grow more unpredictable and property values rise, PIAM said homeowners should reassess their protection strategies for their property and contents.

Citing a 2024 climate resilience survey by Zurich Malaysia, PIAM said 54% of Malaysians feel unprepared for potential climate risks, with 38% citing financial constraints as a barrier to being adequately protected.

“Floods (75%), heatwaves (74%) and landslides (70%) are the top worries, while urban infrastructure risks, for example fallen trees and sinkholes, are becoming an emerging concern (67%), following recent incidents in Kuala Lumpur,” it said.

PIAM, on its part, is raising awareness of the flood coverage options available for homeowners, citing policies that could be just RM14 a month (or 0.086%) of the sum insured for a RM200,000 property.

“The key advice is to contact your insurance provider or agent to learn more about fire and home insurance policies and how to best protect your home and belongings against potential risks,” it said.

However, the association acknowledged that there had been a gradual increase in demand among Malaysians for more comprehensive home insurance plans, particularly those covering flood and climate-related risks.

“In the first half of 2023, the take-up rate for fire insurance policies with flood coverage increased to 33%, up from 31% in 2022,” it added.

Some of the preferred coverages include the basic fire coverage, which covers damages from direct burning, heat, smoke, and extinguishing water, which can affect nearby properties. Financial institutions often mandate this for homes with mortgages.

Aside from that, householder and house owner policies cover damages that are not only confined to the structure but also to contents and personal liability.

“These policies offer broader protection, particularly valuable given Malaysia’s vulnerability to floods and fire,” it said.