Dramatic photos of the aftermath of the recent floods that hit Penang are showing homes filled with waist-deep water and floating cars. Local newspapers reported the flood incidents as one of the worst that has ever hit Malaysia in 40 years. But these images have also triggered a question: Do we all need flood cover?  

It’s obvious that the risk of floods is no small matter and can have a serious impact on a car owner’s financial well-being. So we take a look at why you need flood cover for your car.

1. Flash-floods happen frequently in Malaysia

Malaysia usually experiences two monsoon seasons in a year. The Southwest Monsoon season usually happens from May to September and the Northeast Monsoon season starts from November up to March the following year. This means every year you can expect heavy downpours and for anyone living in low-lying areas the possibility of flash floods happening every year is definitely high.

Recently reported flood-prone areas according to infobanjir.

Perlis – Berseri

Kelantan – Pasir Mas, Tumpat, Tanah Merah, Pasir Puteh, Kuala Krai

Kedah – Padang Terap

Terengganu: Marang, Setiu

Pulau Pinang – Timur Laut, Seberang Perai Tengah

Pahang – Raub, Kuantan

2. Flood-damaged cars can cost a bomb to repair

The severity of damages to a car that has been caused by floods can vary. The worst damage can cost a car owner up to RM 50,000 to repair. Cars that are fully submerged while engines are still dead will not have major damages where the cost to repair won’t be as high.  

But if a car is fully submerged and car owner attempts to start the engine, the electric control unit (ECU) will be shorted out.For an average car, this repair work can cost up to RM 7,000 and a whopping RM 30,000 for a BMW!

Source: The Star 

3. Your current car insurance may not cover Damages Due to flood

You might assume that in a tropical country like Malaysia, with frequent flash floods every year, your policy includes automatic coverage for damages to your car due to flood. Perhaps it’s time to check your policy again.

Even though you may own a Comprehensive cover, it does not necessarily include coverage against flood! Flood coverage is usually offered by insurance companies as an add-on option. The cover falls under special perils such as flood, earthquakes, storms, typhoons, landslides, and volcanic eruptions.

This, of course, requires an additional premium of 0.5% from the total sum insured of your vehicle. That may sound like a lot to top-up in addition to your car insurance premium, but it’s always best to re-evaluate your need for a flood cover.

Here is an estimate of how much you may need to add-on.

Sum Insured: RM 30,000

Base Premium : RM 1,059.50

No Claim Discount (55%): RM 582.73

Base Premium: RM 476.77

Flood Cover (0.5% from sum insured): RM 150.00

Subtotal: RM 626.77

Subtotal after rebate (10%): RM 564.09

Total premium you need to pay after GST and Stamp Duty:  RM 607.94

While it makes a lot of sense for someone who lives in flood-prone areas to take up flood cover, it may also make sense for someone who drives frequently in flood-prone areas to consider getting the flood coverage.

While flood could be important to you, there are other additional covers you may want to consider. Read more on additional coverage for your car here.

Parting Thoughts

Usually, car owners are tempted to opt for the cheaper premium and more often than not they tend to miss some important coverage that they should seriously be considering given the risk factors that they are exposed to.

In other instances, car owners tend to assume that their cars are covered for damages due to other causes when it’s not. Check out 7 other instances that your car insurance does not cover.