By Zufazlin Baharuddin
KUALA LUMPUR, April 20 (Bernama) -- The gas explosion incident at Putra Heights, which destroyed scores of homes, serves as a stark reminder for homeowners to seriously consider insuring their houses as well as the contents inside their homes to mitigate losses from such unforeseen calamities.
What happened on April 1 comes as a shock, as Malaysia rarely has records of large-scale fires or explosions that wipe out houses and properties in the blink of an eye.
The gas pipeline explosion at Putra Heights and the intense heat it generated destroyed nearby residential properties and vehicles within a 500-meter radius.
It erupted into a massive mushroom cloud, with flames reportedly soaring 20 storeys high.
Some 1,254 people from 308 families were affected, and 87 houses were destroyed, and 148 others needed repairs.
The tragic event serves as a stark reminder that unexpected calamities can happen at any time and anywhere.
It also underscores the importance of homeowners buying comprehensive home insurance to provide financial protection against such unfortunate events.
Homeowners should be aware of the three types of home insurance coverage available, namely house owner (HO) policy, householder (HH) policy and fire insurance.
House Owner Policy
According to the General Insurance Association of Malaysia (PIAM), home insurance covers damages caused by explosions, which fall under the HO policy.
The HO policy is a comprehensive policy that covers the physical structure of the home against risks such as fire, lightning, explosions, natural disasters, and burst pipes.
PIAM chief executive officer Chua Kim Soon said that for the Putra Heights incident, it covers damage from the explosion, including the gas pipeline explosion, with compensation based on rebuilding costs.
“For claims purposes, they need to obtain written approval from the insurer before proceeding with any house repairs, including emergency work, as unauthorised work may not be covered by the homeowner policy and certificate,” he told Bernama.
Chua said that for homeowners with a mortgage loan, banks typically require homeowners’ insurance as part of the loan agreements, while for condominiums or apartments, it is mandatory for the joint management body (JMB) to take a master policy for home insurance coverage.
An HO policy is priced at an average of RM382 per year for flats and apartments, and RM377 for landed houses. The premium price would depend on the sum insured value of the house.
Etiqa General Insurance Bhd chief executive officer Fukhairudin Mohd Yusof said this policy protects the building’s structure against risks by ensuring that the bank’s financial interest in the property is safeguarded.
Hence, this generally means homeowners with active loans are likely to have the necessary coverage in place for claim purposes.
Householder Policy
The HH policy, meanwhile, involves the safeguarding of household contents.
The policy covers the contents within the home, protecting against loss or damage due to events such as fire, theft, and certain natural disasters.
This highlights the importance of the HH policy, especially in light of the recent incident at Putra Heights.
Unlike the HO policy, which is mandatory when a home loan is involved, the HH policy is optional and can be purchased separately to cover the contents of your home from insurance companies, with an average price of RM142. The premium would depend on the sum insured value.
Hence, it is often overlooked due to a lack of awareness.
As a result, many affected homeowners may not be covered for the loss or damage of their household contents in such unexpected events.
Fire Insurance
Chua said the standard or basic fire insurance covers damages due to fire, lightning, and explosion caused by gas used for domestic purposes.
“For damages due to an explosion caused by other than domestic gas, an extension which is an optional add-on can be purchased with the fire insurance.
“Meanwhile, the compensation is based on the rebuilding costs,” he said.
Additionally, Fukhairudin said fire insurance is not mandatory for all house owners unless it is required by their banks for housing loans.
“From a societal perspective, one of the main reasons for low uptake may be due to the lack of awareness or affordability, particularly among the low-income segment of the population,” he said.
Take-up Rate for Home Insurance
According to the Department of Statistics Malaysia, there were 9.10 million households in 2024, but only 3.88 million fire and home insurance policies were recorded, reflecting a take-up rate of 42.6 per cent.
In comparison, there were 8.88 million households in 2023 with 3.89 million fire and home insurance policies recorded, reflecting a take-up rate of 43.8 per cent.
Chua said that with the take-up rate hovering around 43 per cent, it indicates that more than half of Malaysian households remain unprotected against structural damage caused by fire, floods and severe weather events.
Besides this, statistics from Insurance Services Malaysia Bhd showed the gross written premiums (GWP) for the HO policy in Malaysia increased 4.35 per cent to 787.30 million from January-September 2024 compared to 754.46 million a year ago.
Meanwhile, the GWP for the HH policy in the country grew 10.35 per cent to 32.21 million from January-September 2024 compared to 29.28 million from the corresponding period in 2023.
Secure the Home, Inside and Out
Etiqa General Takaful Bhd chief executive officer Shahrul Azuan Mohamed pointed out that gaps in awareness about home insurance coverage still persist, including fire policy.
“Many homeowners assume that risks such as floods, landslides, and other natural disasters are automatically covered under standard policies. In reality, special perils coverage must be purchased separately,” he said.
Meanwhile, for household protection, Zurich Malaysia recommends homeowners opt for the HH policy to better protect their property and belongings, ensuring greater peace of mind.
“While there has been an increase in the uptake of HH policy in the past year, the overall uptake remains relatively low, primarily due to a lack of awareness and understanding of the importance of comprehensive home protection,” it added.
The Putra Heights incident serves as a wake-up call that a catastrophic event can strike and cause a disaster at any moment, and change everything in an instant.
We must also ensure that we are prepared by securing proper home insurance coverage to protect our homes, belongings, and financial well-being from unforeseen circumstances.
Whether it is through a comprehensive house owner policy, household content coverage, or fire insurance, taking the necessary steps today can provide peace of mind and safeguard as well as mitigate against potential losses tomorrow.
-- BERNAMA
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