Home Insurance 101: Protect Your Home Against Floods & Other Disasters

Following the worst flood incident Malaysia has seen in over 80 years, news platforms over the last two weeks were filled with pictures and videos depicting the devastating loss that displaced over 60,000 people. 

According to Malaysian Insight, almost 74% of homeowners in Malaysia are not covered against flood risk even though the Disaster Management Agency (NADMA) believes that 4.8 million people nationwide live in flood-prone areas. 

So, why home insurance? 

While government aid and crowdfunding sources are available for victims of the flood, the financial assistance comes close to nothing compared to the cost of rebuilding a home. There are many benefits to having a home insurance or takaful plan, from extensive coverage and financial security to peace of mind and ease in financial planning. 

Notably, a percentage of the population affected by the recent floods come from lower income groups who either have no awareness of the true affordability of home insurance and takaful plans or simply cannot afford to sustain the premium or contributions required.

This is a struggling reality; but in weighing out the difference, the cost of paying a small monthly sum is definitely easier than rebuilding through a loss. 

Did you know you can secure a home insurance plan from as low as RM5.30 a month? 

Picking the right home insurance plan

Ensuring you secure the right plan can be overwhelming, but it doesn’t have to be. To start, pick the plan best suited to your individual needs based on affordability, location and value of your home and possessions. Generally, the plans offered are: 

Houseowner protection – coverage for all types of damage to the structure of your home. This includes fires, floods, landslides, lightning, road accidents involving your home and more. Loss to possessions contained within the home will not be covered. 

Householder protection – coverage for the contents of your home. This plan was curated for people renting their homes and would only need to worry about their possessions instead of the property. Coverage would include jewelry, furniture, electronics, art and more. Reimbursements will be available for damage and theft to the items you list. 

Houseowner and householder protection – a combination of both options, giving you complete protection for the structure of your home and its contents.

All three home insurance and takaful options offer protection against flood damage with the difference being on the items covered. 

Ideally, the houseowner and householder plan is highly recommended as it offers the most coverage. However, if finances are constrained, pick between coverage for your building or its contents, based on the value of your possessions and your personal priority. 

Myth and Facts on Protection Plans 

From a quick conversation with friends and family, we discovered that many people forgo a home plan under the assumption that home insurance is complex to understand or too expensive, going into the hundreds and thousands. To break this down, here are some myths and facts. 

Myth: Home insurance or takaful is expensive

Fact:  A coverage plan is available from as low as RM5.30 a month (that’s RM63.60 a year)

Myth: Home insurance or takaful is complicated to understand

Fact:  Coverage plans are available online with bite-size information to clearly portray everything you need to know

Myth: Home insurance or takaful is only for the elite or higher income groups

Fact: Protection is for everyone 

Myth: Home insurance or takaful is only for people who own property

Fact: Householder insurance offers coverage for the contents of your home 

Myth: I automatically get a home insurance plan when I buy my house 

Fact: Housing loans come with MRTA or MRTT which is an insurance plan for your housing loan, not for your house. 

There is so much to be done to ease the effects of heavy rainfall in townships, cities and villages in Malaysia. However, government planning and changes are long-term plans we have no control over. So in focusing on what we can control, ensure your property and finances are secure with the right plan. 

Source: Malaysian Insight | Etiqa

The information contained in this blog is provided for informational purposes only, and should not be construed as advice on any matter. Etiqa accepts no responsibility for loss which may arise from reliance on information contained in the article. This information is correct as of 11 January 2022.