//Understanding Your General Insurance Coverage During The Movement Control Order (MCO)

Understanding Your General Insurance Coverage During The Movement Control Order (MCO)

As we continue to ride through the unprecedented wave of the current global COVID-19 pandemic, the General Insurance Association of Malaysia (PIAM) is aware of many uncertainties that have arisen amongst the consumers. There is genuine concern if their insurance policy will provide them with the protection that they need. Property and business related insurance are high on the list for obvious reasons.
PIAM urges consumers and business owners to review their property insurance policies such as their fire insurance and business interruption coverages where necessary.

Generally, the basic fire insurance policy provides protection for your buildings and/or its contents from losses or damages caused by fire, lightning and domestic gas explosion. It may also be extended to include special perils such as storm and tempest, earthquake and volcanic eruption, flood damage, impact damage, riot, strike, malicious damage, landslips and landslide etc. For businesses, there may be additional extensions to cover electrical installation, bush fire, spontaneous combustion, sprinkler leakage and smoke damages.

Meanwhile, the business interruption insurance (which can only be taken together with fire insurance) provides indemnity to the insured in respect of loss of profit. A business interruption policy compensates loss of gross profit resulting from a fire including damage by any additional perils specified in the material damage policy. This is in respect of reduction in turnover and increase in cost of working. This policy can be extended to include the following cover:

  • a) Specified/Unspecified supplier’s extension
  • b) Prevention of access extension
  • c) Public utilities extension (water, electricity and gas)
  • d) Specified customer’s extension
  • e) Infectious or Contagious Diseases, Murder, Suicide, Pest, Food or Drink Poisoning or Defective Sanitary Arrangements

This is the first time that we have been faced with a pandemic that involves a Movement Control Order (MCO). It is apparent that all businesses and service providers are making every effort to ensure that their customers or policyholders continue to be served within the parameters of their respective contracts or agreements. In this respect, not all insurance companies are providing the same coverage for an insurance policy. PIAM advises consumers and business owners to contact their respective insurers and insurance agents or brokers for any assistance/clarifications on their property insurance policies. Be aware that there may be unscrupulous parties which are prepared to make promises that cannot be met by your insurance company.

PIAM would like to reaffirm our members’ commitment to continue serving and supporting policyholders’ interests during these unprecedented times. PIAM confirms that all relevant fire policy coverage which are conditioned on the premise being occupied will not be affected by restrictions imposed by the MCO. In short, policyholders are assured continuity of cover despite their premises not occupied during the MCO period. However, policyholders are expected to take all reasonable precautions to safeguard their premises during this period. This exemption however is not applicable to premises unoccupied prior to or not related to the MCO.

Consumers are also advised that under the current de-tariff environment policy coverage, terms and conditions may differ between one insurer and another. As insurers strive for product differentiation for the benefit of consumers, what is covered in one policy may not be covered in another policy. Consumers are therefore advised to shop around for the best protection that cater to their needs.

For further information, please visit the following webpages on PIAM’s website:
http://www.piam.org.my/consumer/general-insurance-products/personal-lines/fire-house-owner-house-holder/
http://www.piam.org.my/consumer/general-insurance-products/commercial-lines/fire-business-interruption/
Alternatively, you may email your queries to [email protected]