PIAM CEO Chua Kim Soon believes the low take-up rate may be largely due to psychological reasons.
Data released by PIAM today showed that an average of 27.6% of Malaysian households had flood insurance in 2025.
The figure was even lower for motor insurance, with only 13% having flood coverage for their vehicles.
In contrast, total losses from floods reached RM636.9 million in 2025, according to the statistics department.
PIAM CEO Chua Kim Soon said he believed the generally low take-up rate for flood insurance may be due to psychological factors, with Malaysians relying on personal experience to decide whether to purchase coverage.
“People think it (flood incidents) will never happen to them. They also think insurance is a waste of money. However, when it strikes, it strikes big,” he said at a press conference.
PIAM noted that while houseowner and householder insurance policies usually include flood coverage, motor insurance generally excludes natural disasters, which are usually covered under the optional “special perils” add-on.
Asked why insurance companies do not automatically include coverage for all natural disasters in their policies, Chua said this was about giving customers a choice rather than forcing them to take up additional coverage.
He said the insurance industry is reluctant to include every add-on from the start as it operates on customers’ willingness to take risks.
“The industry does not want a situation where everything is added on. It is up to the customer to decide what isn’t needed. Most of the time, people do not read the fine print.
“We don’t want to force people to pay extra for cover they do not want. They know what they are buying and what they are paying for,” he told FMT. - FMT
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