Flood Insurance Coverage – Why Is it Crucial For You and Your Car?

You have probably been presented with several add-ons to choose from while renewing your auto insurance. One of the more typical ones is flood coverage or specific dangers, which is proving to be increasingly significant in light of the recent floods that affected numerous states in Malaysia (and future such catastrophes).

It is obvious that the possibility of flooding shouldn't be disregarded because it might seriously harm your financial stability. Even if you live in a place that doesn't often flood, things can suddenly change if you're leaving and there is a severe downpour, and you might find yourself and your car in an undesirable scenario.

If your insurance policy does not cover unique risks, you won't be able to file a claim if flooding damages your car, and you'll probably have to pay a substantial repair price out of pocket.

(Image source: The Rakyat Post)

Consumers in Malaysia cannot purchase a separate takaful or insurance policy that provides flood coverage. Currently, comprehensive and basic automobile insurance policies offer flood coverage as an optional add-on for an additional premium or donation.

In addition to automobile and fire policies, a homeowner's or householder's policy may also include the coverage. Flood cover should be of significant concern to us given that 9% of Malaysia's land is flood-prone and 4.8 million people live in flood-prone areas due to climate change, an equatorial climate, and monsoon seasons.

As a result, it is sage to sufficiently insure homes and possessions in order to lessen the financial burden of such a risk, should it occur.

(Image source: PaulTan.org)

Many insurance companies offer special perils coverage for a fee that is typically based on the agreed/insured value of the vehicle. Even if it won't be pleasant to see how your car looks after being damaged by flood waters, you will at least be temporarily protected financially.

These prices apply to the entire insured amount, although with some insurance companies, you can choose a smaller sum insured, which has a different cost. Because some special perils coverage options only cover floods and others extend coverage to other acts of God, some special perils coverage options can also be restricted (volcanoes, landslides, trees, lightning strikes etc.)

For instance, Etiqa offers two options: basic flood coverage (floods and storms) costs 0.25 percent, while expanded flood coverage (which includes landslides, hurricanes, and other natural disasters) costs 0.5 percent. 

You might spare yourself from having to empty your bank account to have your vehicle fixed because of flood damage by paying a tiny fee compared to the value of your car. For that peace of mind, special perils coverage should be high on your priority list if your auto insurance is up for renewal. Even though nature can be unpredictable, making sure you are protected shouldn't be.

(Image source: Carlist)