Home insurance and the monsoon season: preparing for a claim
Basic fire insurance often excludes flood damage by default. Here is what to check before the monsoon season, and what to do if water gets in.
Every monsoon season brings the same pattern in Malaysia: parts of the country flood, homeowners discover their policy did not cover what they assumed it did, and the conversation about flood cover happens after the water has already receded. Checking your policy before the season, rather than during it, is the one step that actually changes the outcome.
Fire insurance and flood are not the same thing
A basic fire insurance policy protects the structure of your home against fire and a defined set of other perils, but flood, along with windstorm and earthquake, is often excluded from a basic policy rather than included by default. This surprises a lot of homeowners, who assume "insurance on the house" means insurance against water damage generally. The way to close that gap is either to add flood as a named peril to your fire policy for an additional premium, or to take out a houseowner and householder insurance policy, which is designed to bundle broader natural peril cover, including flood, windstorm and earthquake, for both the structure and its contents, as standard.
Given that seismic activity has also been recorded in parts of Peninsular Malaysia in addition to Sabah's known exposure, the industry view is that homeowners nationwide, not only those in traditionally flood-prone states, are worth reassessing for both risks rather than assuming their area is exempt.
Check these before the season starts
- Whether flood is actually included, or only fire and the standard named perils. Do not assume; ask your insurer or agent to confirm in writing what perils apply to your specific policy.
- Whether you are insured on rebuilding cost or market value. Insuring based on your property's market value rather than what it would actually cost to rebuild is a common and easily missed cause of underinsurance, since the two figures can differ substantially, especially for older homes on land that has appreciated. A payout based on an inadequate sum insured will not fully rebuild your home even if the claim itself is accepted.
- Whether your contents are covered separately. A structure policy generally does not automatically cover the contents inside, including fitted furniture and fittings; a separate householder or contents section, or a standalone policy, is usually needed for that.
- What your policy's specific deductibles and exclusions say. Coverage terms and deductibles can vary significantly between insurers, and reading the fine print before a claim is the only time that reading actually helps you.
- Whether your sum insured has kept pace with renovations. Reassess coverage yearly, particularly after any renovation, since the policy is renewed annually and an outdated sum insured is a common source of underinsurance discovered only at claim time.
If flooding happens
- Prioritise safety first, and only return to the property once it is safe to do so.
- Document everything before you clean up. Photograph and video the water level, damaged structure, and damaged contents from multiple angles before you move or discard anything, since this evidence is what supports your claim.
- Notify your insurer promptly. Most policies require notification within a set timeframe, and delays can complicate a claim.
- Keep damaged items where practical, or at minimum keep clear records of them, until an adjuster has had the chance to assess the loss, rather than disposing of everything immediately.
- Get repair quotations from more than one contractor before committing, both to manage cost and because your insurer may require supporting quotations as part of the claim.
- Ask about interim living arrangements if the property is uninhabitable, since some houseowner policies include a benefit for alternative accommodation while repairs are underway; check whether yours does before assuming it.
Shopping around properly
PIAM's own guidance to homeowners is to shop around for the best coverage based on the assessed risk to your specific property, rather than shopping around purely for the lowest premium. A cheaper policy that excludes flood, or insures on market value rather than rebuilding cost, can end up costing far more than the premium difference the day you actually need to claim. Our property plan comparison lets you check which plans include flood as standard against which treat it as an optional add-on.
Talk to an advisor
Whether your current policy covers flood, what sum insured actually matches your rebuilding cost, and whether your contents are adequately covered are all specific to your property and your existing policy wording. A licensed advisor can review your current cover against the season ahead, ideally before it starts. Find one through the advisor directory, or ask our assistant to explain what your policy currently excludes.
Sources
This content is educational information from a licensed advisor, not financial advice. Product details vary by insurer — verify specifics with an advisor.
