How do you buy a flood cover for your home-building and house-contents?
Flooding in respect of your house and contents can arise from the following common occurrences:
- Continuous or a prolonged heavy rainfall,
- Overflowing or deviation of water from their normal channels or the sea, and
- Overflowing or bursting of public water mains or water tanks or pipes owned or belonging to a third party
However, in recent days you see earthquake-driven flooding as a norm within our neighbouring countries…… familiar with the word, “tsunami”?
How and what to buy?
Before we work out the buying mechanism, it is appropriate if the definition of “flood” is made clear from the perspectives of the Malaysian insurance operating environment. And it is also important for us to differentiate between loss or damage as a direct result of flooding and those that are categorised as water-related damages, like “Storm & Tempest” or “Bursting or Overflowing of water tanks apparatus or pipes” extension coverage or those relating to the Acts of God like “Earthquake & Volcanic Eruption” and “Subsidence & Landslip” extension coverage. These are necessary simply because the Malaysian Fire Insurance is tariffed and you as a consumer can have a much clearer understanding before selecting your extended coverage.
| FLOOD for the purpose of the flood extension, shall mean the overflowing or deviation from their normal channels of either natural or artificial water courses, bursting or overflowing of public water mains and any other flow or accumulation of water originating from outside the building insured or containing the property insured, but excluding loss or damage caused by subsidence or landslip. |
There are two types of insurance appropriate to house building and its contents:
- Fire Insurance Policy
- Houseowner / Householder Insurance Policy
Thus it is important that you take note of what type of insurance that you are buying. If you select the Fire Insurance – option 1, please ensure the “Flood” extension endorsement is inserted as part of the policy. The rate is 0.086% or the additional premium is = 0.086% x your policy sum insured. For the full endorsement wordings, please refer to page two of this posting. Do specify your outdoor items otherwise these are not part of the coverage despite having included the Flood endorsement.
Alternatively if you have selected option 2 – Houseowner/Householder Insurance Policy, the “flood” cover is automated as part of the policy coverage. Thus there is no necessity to extend the basic insurance cover. However, please take important notice – Section I is for Houseowner (or House building) and Section II is for Householder (or Contents). If you want to cover both, please state so with the relevant content items and all relevant sum insured(s). The following is the “flood-related” wordings forming part of the Houseowner/Householder policy:
| 9) Flood but excluding loss or damage caused by subsidence or landslip; subject to the following excess clause. |
| Excess clause – As regards loss or damage (other than by fire) to the Buildings of the Private dwelling house but not the Contents directly caused by any Perils to which this Clause is hereinbefore stated to apply, the Company’s liability shall be limited to its rateable proportion of the amount by which such loss or damage exceeds the amount stated in the Schedule. This Clause shall separately apply to: |
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Massive flooding causes heavy losses to your property - building, contents and vehicle
The reality of buying insurance
Just like any other trade, any successful transaction would require a willing buyer – willing seller trade-off. Likewise this is the same with insurance, when you wanted to buy, there may not be any willing seller. The insurance company may not want to sell insurance cover if your house is located within or even nearby a flood-prone area. From the insurer’s perspectives, flood cover is only underwritten when the location is not flood-prone and without any history of flooding, at least for the last three years – which means flooding to the insurers must be a result of an unforeseen and sudden event.
Happy buying and insuring!
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