Be prepared for the monsoon with BJAK’s special perils cover

It’s already been a punishing year for Malaysian drivers, and for the majority without special perils cover, it’s also been an expensive one.

Between January and May, monsoon rains and thunderstorms brought flooding, landslides and fallen trees across the country from East Malaysia to the Klang Valley.

For many motorists, the damage was not limited to the road. Vehicles were left submerged in car parks, and drivers were forced to abandon them in rising waters.

With the inter-monsoon phase just around the corner, the wettest weeks for much of the country are still to come. It is the period in which the southwest monsoon (late May to September) gives way to the northeast monsoon (November to March).

It is one of two inter-monsoon periods – April to May and October to November – when thunderstorms are most frequent, according to the meteorological department.

During these phases, weak variable winds create favorable conditions for heavy rainfall and strong winds, increasing the likelihood of flash floods and fallen trees, especially during peak traffic hours.

So here is what Malaysian drivers need to know to stay protected.

Standard car insurance does not cover flood damage

Special perils is a car insurance add-on that protects a vehicle against damage from natural disasters such as floods, storms, landslides and fallen trees. A flood add-on is narrower, covering only flood damage.

According to the General Insurance Association of Malaysia, only 4% of Malaysians hold flood insurance coverage for their vehicles.

This is because standard comprehensive motor policies do not include flood damage, and many drivers are unaware of it until it is too late. As Bank Negara Malaysia (BNM) sets out, motor insurance will not cover “loss or damage arising from an act of nature, such as flood, storm and landslide”.

A comprehensive car insurance policy covers accident damage, theft and fire. Third-party, fire and theft policies and third-party-only policies are narrower still, and exclude natural disasters as well.

Neither add-on is unlimited. They do not cover wear and tear, mechanical failure or consequential loss, and a claim may be rejected where a vehicle was driven into water despite an official flood warning.

Both add-ons attach to comprehensive covers, so drivers on third-party policies cannot add them on their own.

Cost varies by insurer and vehicle, but the add-on typically runs at about 0.2% of the insured value, roughly RM100 a year on a RM50,000 car.

Why timing matters

An add-on can generally be taken up at any point during the policy year, provided the vehicle meets the applicable terms and conditions. There is no seasonal cut-off.

What cannot be done is adding it after the fact. If a vehicle has already been damaged by flooding, that existing damage is not claimable under an extension purchased afterwards. Cover applies to eligible future incidents, subject to policy terms.

How drivers can protect themselves

• Check the policy schedule. Ensure a natural disaster add-on is listed by name.
• Don’t wait for renewal. Cover can usually be added mid-policy, subject to the insurer’s terms.
• Consider where the car is parked. Basement bays, ground-level lots and tree-lined streets each carry their own risk.
• Verify the sum insured. It should reflect the vehicle’s current market value, as this determines the payout.
• Compare before buying. Insurers price these add-ons differently, so the cheapest policy may not remain so once cover is added.

While a majority of Malaysian vehicles remain without flood protection, some drivers are closing that gap on BJAK, a leading insurance platform and approved financial adviser and Islamic financial adviser under BNM.

To date, the platform has increased adoption of special perils protection among its motor-insurance customers from 1% to 20% and continues to help customers make informed choices through easy comparisons across multiple insurers.

Drivers can compare special perils cover across multiple insurers ahead of the monsoon.

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