When you buy a car, it is compulsory for you to insure it. A regular motor insurance policy would usually cover the cost of repairs or give you compensation in case of an accident, theft or fire.

But with the heavy flooding in some parts of Malaysia recently, you might be surprised to find out that most motor insurance policies don’t automatically cover the cost to repair damages that you might face in a natural disaster, like a flood!

So, if you want to protect your car in the event of a national disaster, especially if you live in a place where floods happen regularly, you’ll have to pay an additional premium.

How does having the additional coverage help protect you financially?

When you get an add-on for flood coverage, your motor vehicle will be covered in case of a flood, falling trees, or typhoons. While typhoons aren’t too common in Malaysia, you must have heard enough stories of cars being damaged in floods and trees falling on cars. Unless you have a good amount of savings for emergencies like these, you might not be able to afford to repair your car and in the worst case scenario might end up without a car to use.

So, if you have flood insurance, your policy will cover the cost of repairs for your vehicle or provide you with some compensation if your car can’t be fixed.

That being said, you have to remember that all these policies will usually have specific terms that you’ll have to follow if you need to make a claim. For example, if you drive into a flood intentionally or if you park your car in a place that isn’t a proper parking spot and it gets damaged in a flood, your insurance won’t cover the cost of damages. This means you’ll have to pay for the repairs yourself. So, make sure you park in a proper parking spot and not just by the side of the road!

How much does it cost to insure your car?

Currently, an add-on for flood coverage would cost 0.2%-0.3% of the sum your vehicle is insured for. For example, if your vehicle is insured for RM50,000, your flood coverage will cost you RM150 (at 0.3%), on top of the premium you’d pay for your insurance coverage. So if you were paying RM1,500 a year for the regular motor insurance coverage, the total you’ll have to pay is RM1,650 for the additional flood coverage.

Do note, when you pay the extra coverage, it doesn’t increase the amount your car is insured for. It extends your existing insurance coverage to cover you for natural disasters like floods. So, the total sum you’re insured for will remain at RM50,000.

Should you take the add-on for flood insurance?

Many people don’t take the add-on for flood insurance as they feel the areas they live and travel within don’t usually get flooded. But natural disasters can’t be predicted or avoided, as we saw recently, so it can be helpful to make sure your vehicle is well protected. That way, if your car is caught in a flood, you won’t have to dig into your savings to pay for the repairs. So, the add-on could save you from paying for expensive repairs in the future.

What do you need to look out for?

Most insurance companies would charge you 0.2%-0.3% of the total sum your car is insured for. So, make sure to shop around to find the insurance premium that fits your budget and gives you the most coverage.

When you compare insurance policies make sure to add up both the cost of the add-on and the cost of the regular premiums and compare these costs with what you can afford so you stay within your budget!

Having insurance can help give you a form of financial security in case something happens to you or your belongings. To learn more about insurance, read our guides and blogs below.

Buying motor insurance and making claims (or not)

What to look out for when buying insurance

Introduction to Takaful

*The add on cost for flood coverage is accurate up to the date of publish for this blog article