MOST car owners do not have sufficient insurance coverage for their cars in the unfortunate event that they are involved in a catastrophe.
The floods in Kelantan and Temerloh last month is a good example to start with.
The General Insurance Association of Malaysia (PIAM) stated last month:
“All policyholders, both businesses and individuals located at the flood-stricken areas are advised to check their fire and motor policies to determine whether they are covered for loss or damage resulting from the floods,” said Chua Seck Guan, the Chairman of the General Insurance Association of Malaysia.
“Member companies of PIAM and Malaysian Takaful Association are on standby to help, and will implement measures to lessen the financial burden of all whose livelihoods have been affected.”
“PIAM member companies will process all flood claims so long as flood is an insured peril, regardless of whether a state of emergency is declared or not,” he said.
Although many cars manufacturers offer special discounts for repair and parts replacement of the affected cars, is it enough to cover the overall cost of damages?
When it comes to cars, it will be wise to insure them against Special Perils if they are used in flood prone areas such as Kuala Krai and Temerloh.
“Car salesmen should inform car buyers about the availability of Special Peril insurance. However, even though they are informed, many customers usually refuse the special peril because it is expensive,” said Patrick Lam, retired senior vice-president from the Mitsui Sumitomo Insurance Group (MSIG).
“Special peril is an insurance extension which costs 0.5 per cent of sum insured of the cars”, Lam said.
In case of cars owners who didn’t insure for special perils, it will be double-jeopardy for them as they have to spend money to repair their cars as well as to continue paying car instalments.
In some cases, the cost of repairing the car may exceed the value of the car.
PIAM and Malaysian Takaful Association (MTA) had earlier announced that the industry is committed to offer assistance to all flood victims, including allowing the payment of annual premiums on an instalment basis and expediting the settlement of claims made by policyholders.
“In the case of larger claims which may require longer processing time, considerations would be given to allow for interim payments of a certain percentage of the total estimated loss pending full settlement later,” said PIAM.
PIAM also advised public to review their insurance policies with their insurers or insurance agents to establish if the cover provided is sufficient to mitigate any serious financial impact due to flood losses and damages.
As circumstances of each case or claim may differ, policyholders are advised to contact their insurers to report their losses to enable their insurers to assess the loss and process their claims as quickly as possible, addressed (PIAM).