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Malaysia Car Insurance Shocking Statistics : Less Than 2% Of The Flood-Damaged Cars Are Insured – Do Not Start The Car Engine Will Save You RM 40 000

How many people in Taman Sri Muda, Shah Alam, who suffered last week’s catastrophic floods would have been protected by special perils motor insurance?

Most of the motorcar franchise workshops say less than 2% of the flood-damaged cars that have been sent for repair are insured against special perils, which include floods.

Let’s be generous and say 5% were insured.

That means most of the car owners in Taman Sri Muda will be financially affected by flood damage. Almost every friend or relative you have living in Taman Sri Muda would welcome help in one way or another.

We haven’t even touched on uninsured property, for example homes and household items such as electrical appliances and furniture.

An owner of a typical small car, flooded up to window level while parked and with its engine switched off, will need to spend up to RM1,700 on changing all engine fluids, servicing and drying out electronic components, and cleaning and blow drying the seats and upholstery.

For a mid-size South Korean car driven into the flood until water damaged its engine beyond repair, a replacement half-cut engine would cost about RM17,000 while a new engine would set the owner back around RM54,000.

The owner would also have to continue servicing the hire purchase instalments for the next three to six months while the car was being repaired. Those without special perils coverage would not be able to consider starting repairs due to financial constraints.

During that time without a car, the owner would have to pay for an alternative mode of work-related travel, including commuting to office.

The financial disaster brought by the floods would have been ameliorated if the central bank had fully liberalised Malaysia’s motor insurance sector to allow it to progress to higher levels based on competition to provide good service to its customers based on education and what customers need and can afford.

The floods have revealed the paucity of modernity in almost all the participants in Malaysia’s insurance industry leading to the under-insurance of urban Malaysians, including vulnerable working-class residents in Taman Sri Muda, in Shah Alam’s Section 25.

If we had a completely liberalised insurance industry as Bank Negara Malaysia (BNM) envisioned 10 years ago, then we would have a more educated class of urban working Malaysians.

Insurance companies would be able to mount marketing campaigns to educate car owners that a special perils clause is 60% cheaper and now more affordable than five years ago when motor insurance was still fully “guided” regarding prices.

Car owners would be educated that even first-party coverage is not as comprehensive as it is named: special perils, legal liability, betterment are optional items, and insurance agents have an uphill task selling these protections.

The floods have exposed the vulnerability of the urban working class, and we should be reminded that one of the prime reasons for nurturing the insurance industry is so that it can provide a better social safety net.

BNM and the finance ministry should be guided by this and recognise that the competition which follows liberalisation is the only proven way to minimise under-insurance and optimise social security.

It’s time for the financial sector to be more professional and innovative, rather than be controlled by self-serving underwriters and managers who are more concerned with their bottom-line results and their bonuses, rather than being cognisant of their social responsibility to insure the mass market: those who need insurance including urban workers who have minimum resources to draw on in times of need.

The floods are also a wake-up call to the government that a progressive and innovative insurance industry is needed to cope with the new threats of global warming to life and property.

And now is not the time to withhold federal government agencies from serving an opposition state, Selangor.

Four tips for car owners

There are at least four things to learn from climate change, as the floods have highlighted:

If you have a new or newer car, buy the special perils policy to insure against floods. It is about RM100 for every RM100,000 coverage and is much cheaper than in 2016 when it was about RM500 for every RM100,000. This value for money deal started from 2016 when BNM began its slow pace into de-tarification of motor insurance.

Avoid driving into a flood if most of the other cars are parked by the higher parts of the road. It’s cheaper to repair a car that was stationary and with its engine switched off, than to repair and change the engine of a car that was driven into water higher than the engine’s air intake.

Park your car on high ground and walk the rest of the way home if there’s a weather warning. For your own monitoring purposes if you live in flood-prone areas like Taman Sri Muda, you might like to download and subscribe to the Disaster Alert App by the Pacific Disaster Centre on your App Store. As global warming is shifting weather patterns, we are in danger of being in the typhoon zone – a tropical depression is prelude to a typhoon.

Insure your car at its proper value. As Malaysia is a generally safe environment without typhoons, earthquakes and tsunamis, there is complacency among the people and government disaster and relief agencies. Global warming is creating more extreme events and at increasing frequency. Our risk profiles will change and similarly, our insurance needs.

Companies giving flood aid

Modenas, Perodua and Proton have announced flood assistance packages to help their customers, with Proton extending a generous towing service of up to RM200 in costs when accompanied by a police report of the car being submerged in the flood.

Source : FMT

Repairs to flood-hit cars may cost RM40,000

The unexpected floods last weekend have caused irreparable damage to a large number of vehicles and motor workshop owners say they are overwhelmed, with the numbers of vehicles waiting for repairs which is expected to rise over the next few days.

Of greater concern is the estimated high cost of repairs, especially for cars with many electronic systems. Workshops say it may cost anywhere between RM20,000 and RM40,000, depending on the model and extent of damage.

UMW Toyota Motor Sdn Bhd body and paint manager Hari Vairavan Nathan said his branch in Shah Alam had checked nearly 50 cars affected by the floods so far.

“We are expecting more over the next few weeks as the floods have not subsided in some places,” he told FMT.

He said the costs of repairs may come up to between RM20,000 to RM40,000 each, depending on the damage and the vehicle’s model.

“Most cars these days are equipped with a lot of electronic components. If they are submerged or contaminated by water, they cannot be serviced. They have to be replaced,” he added.

Hari, who has been with Toyota for 12 years, said that if the victims cannot afford to get to a workshop, they can self-check at home by inspecting the air filter and engine oil for any signs of water contamination.

To reduce the victims’ burden, Hari said his company would be providing free towing services for all Toyota vehicles affected by the flood.

“We are also giving a 25% discount on the total cost of repairs. We will be communicating with banks to provide easy payment plans with zero interest for affected customers,” he added.

Hangar 5, a smaller car repair and maintenance shop in Shah Alam, says they cannot afford to give discounts.

The workshop is currently charging a base price of RM700 to repair vehicles that were not badly affected by the floods.

“But depending on the extent of the damage and the vehicle model, the price can go up to between RM10,000 and RM15,000,” said Hangar 5 co-owner Karthik Palan.

“It’s a massive job because we need to dismantle everything if a car has been completely submerged inside muddy waters. A lot of the electrical components won’t work,” he told FMT.

Ultimately, both Hari and Karthik advised all vehicle owners to add “special perils” to their vehicle insurance as it covers natural disasters.

Source : FMT

Take Note : ‘Do Not Start Car During And After Floods’

Leave your car as it is in the event it gets trapped in a flood.

Trying to start the engine after the floodwaters recede can cost you thousands of ringgit in repairs.

Malaysian Automotive Association president Datuk Aishah Ahmad said that during and after flash floods, car owners should never attempt to start their vehicles.

“Get a tow truck to tow it to the workshop and let the mechanics drain the water from the engine and transmission.

“They can check whether the engine control unit (ECU) is contaminated with water or pollutants. If it is, they can repair it accordingly,” she said yesterday.

Penang Motor Vehicles Workshop Owners Association member Chan Kok Hoe said leaving the car as it is could save owners a lot of money compared to them starting the engine.

“Sometimes, people may be desperate and try to drive their car past flooded areas to get to higher ground.

“But the best way is to not take the risk. Whether their car was flooded while parked or it broke down halfway, just leave the car there,” he advised.

Chan said owners should never start the engine as water would have flooded it and this could cause a short circuit within the ECU.

“Once the ECU is affected, the repair cost is very high. During the Penang floods in 2017, the cost to repair a Myvi can go over RM30,000,” he recalled.

He said cleaning and drying out a submerged car would cost RM2,000 to RM5,000.

“But if you try to start the engine of a flooded car, you can expect the cost to skyrocket to over RM30,000.”

Chan said that in the 2017 Penang floods, one car manufacturer in the state offered a 50% discount for all car parts to help owners whose vehicles were affected.

“That helped people save a lot of money. So, owners in Klang and affected areas can check if their cars’ franchise workshops can offer something similar,” he added.

A word of warning for cars caught in floods near the sea – seawater can damage cars beyond repair.

1 Comment

1 Comment

  1. עיסוי אירוטי בתל אביב

    December 31, 2021 at 2:38 pm

    קמגרה תשדרג לכם את חיי המין ותאפשר לכם הנאה מרבית מהאקט. לטבע פלז’ר שלל פתרונות טבעיים נוספים שישדרגו לכם את חדר המיטות. דירות דיסקרטיות בהרצליה

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