Is your MOTOR INSURANCE POLICY sufficient to protect your vehicle from natural disasters such as flood or landslide





The recent floods that struck several states in Malaysia have caused damage and loss to numerous vehicles. 


The impacted vehicle owners who have purchased insurance policy for their vehicle would expect their insurance company to cover the cost of repairing their vehicle. However, many may not be aware that flood coverage is optional under the standard motor policy which need to be purchased separately as an add-on benefit to the basic coverage


The comprehensive insurance policy provides the widest coverage, i.e., loss or damage to the insured vehicle due to accident, fire or theft and liabilities to other parties for third-party bodily injury and death and third-party property loss or damage. However, a standard comprehensive motor insurance policy will not cover certain losses, such as loss or damage arising from an act of nature i.e., flood, storm, landslide etc.


The loss or damage to your insured vehicle due to the convulsions of nature such as flood, typhoon, hurricane, storm, tempest, volcanic eruption, earthquake, landslide, landslip, subsidence or sinking of the soil/earth etc., will be excluded. However, damages to vehicles arising from flood will be covered if there is an add-on benefit of  ‘special perils’ coverage.


Vehicle owners without the special perils insurance coverage will have their claim repudiated by their insurance company as such claims fall outside the scope of coverage under Section A of the policy. 


The relevant policy exception states:


General Exceptions - these apply to the whole Policy 

Convulsions of Nature

There is no cover (unless specifically purchased) for any loss, damage or liability caused by flood, typhoon, hurricane, storm, tempest, volcanic eruption, earthquake, landslide, landslip, subsidence or sinking of the soil / earth or other convulsions of nature.”


It is important that you review your policy coverage to ensure that your vehicle is adequately covered.


The list of events that an insurance company cover and excluded are specified under Section A of the policy.


Events COVERED by an insurance company

Events NOT COVERED by an insurance company


Loss or damage during the period of insurance arising from the following Incidents:


  1. accidental collision or overturning

  2. collision or overturning caused by mechanical breakdown

  3. collision or overturning caused by wear and tear

  4. impact damage caused by falling objects provided no convulsions of nature is involved

  5. fire, explosion, or lightning

  6. breakage of windscreen, windows or sunroof including lamination / tinting film, if any

  7. burglary, housebreaking or theft

  8. malicious act 

  9. while in transit i.e., being carried from one place to another (including during loading and unloading) of your car by road, rail, inland waterway i.e., across a river or canal etc,. or across the sea by ferry or ship or any sea faring vessels etc. between the island of Penang and the mainland only.


The events the insurer does not cover are the exceptions listed below. 


These exceptions are specific to Section A and are in addition to exceptions listed in General Exceptions section and the applicable Endorsements.


  1. Consequential Losses

  2. Loss of Use

  3. Depreciation 

  4. Breakdown or Malfunction of Parts

  5. Any mechanical, electrical, or electronic breakdown, equipment or computer malfunction, or any other failure or breakdown to Your Car.

  6. Damage to Tyre(s)

  7. Convulsions of Nature

  8. Excess

  9. Loss of Electronic Data

  10. Cheating or Criminal Breach of Trust



How to protect your vehicle against perils such as flood?


The owner of a motor vehicle can insure against  perils like flood by paying additional premium. Once the policy is extended to include special perils cover which is under the endorsement -Inclusion of Special Perils, the policyholder can claim for the loss or damage due to flood or any other convulsions of nature subject to terms and conditions of the policy. 


Other optional benefits


Other optional benefits that you may wish to purchase by paying additional premium are:


  1. Windscreen damage
  2. Passenger liability cover
  3. Strike, Riot and Civil Commotion
  4. Compensation for Assessed Repair Time (CART)

These optional benefits are non-exhaustive. You may refer to your insurance company for other types of extensions or motor add-on benefits that are available.



How to claim if your policy is extended to cover special perils/ add-on benefits?


  1. Refer to your insurance company for the documents required to claim under the additional benefits that you have purchased. 
  2. You must notify your insurance company or the agent with details of the loss as soon as possible.
  3. Provide complete information and relevant documents as this will help your insurance company expedite the process of your claims.
  4. Be mindful that the onus to proof the loss falls on you as claimant.



When should you approach OFS? 


Not all claims submitted are eligible to be reimbursed. An insurance policy is a contract between you and the insurance provider, and the protection provided is subject to terms and conditions stated therein. 


If you feel that your claim is unreasonably rejected by your insurance provider/ takaful operator, you are entitled to appeal to them. If you are still dissatisfied with the final outcome, you may approach the OMBUDSMAN FOR FINANCIAL SERVICES (OFS).


OFS is a non-profit organisation that functions as an alternative dispute resolution channel. OFS resolves disputes freely and fairly between financial consumers and the financial service providers licensed or approved by Bank Negara Malaysia.


If your dispute is within OFS’ jurisdiction, we will proceed to register your complaint. OFS weighs all the facts and evidence provided by the eligible complainant and the insurance provider. We look at each case independently and impartially and we do not take sides. We also consider what is fair and reasonable in resolving a dispute.


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