Just over 1 in 4 households insured against floods, says association

The General Insurance Association of Malaysia (PIAM) reports that only 27.6% of Malaysian households have flood insurance, highlighting a reluctance within the industry to offer comprehensive coverage from the outset. Data revealed that while 27.6% of households have flood insurance, only 13% have motor insurance that includes flood coverage for their vehicles.

Despite flood losses totaling RM636.9 million in 2025, as per the statistics department, many Malaysians seem to be inclined to rely on personal experience in determining the need for insurance coverage. PIAM CEO Chua Kim Soon attributed the low uptake of flood insurance to psychological factors, suggesting that individuals often believe such incidents will not affect them and view insurance as unnecessary.

However, Chua emphasized that when disasters strike, their impact can be significant. The industry's strategy of not automatically including coverage for all natural disasters in policies is aimed at giving customers the autonomy to choose what coverage suits their needs. Chua pointed out that the insurance sector prefers to avoid inundating customers with numerous add-ons, allowing them to make informed decisions about their insurance policies.

He stressed that the industry does not want to force customers into purchasing coverage they do not require, as many individuals may not thoroughly read the fine print before buying.