The Special Perils is an additional coverage which motorist can opt for to cover from loss or damage caused by natural disasters such as floods, storms, earthquakes, landslides and so on. The actual policy wording is:
“In consideration of the additional premium that You paid Us for this endorsement, We agree that the insurance provided under Section A of this Policy will cover loss or damage to Your Car caused by flood, typhoon, hurricane, storm, tempest, volcanic eruption, earthquake, landslide, landslip, subsidence or sinking of the soil / earth or other convulsions of nature.”
The take up rate for Special Perils coverage has increased steady from 11% to 22% according to Allianz General Insurance.
One of the reasons for a higher take up rate is due to the massive flood in Dec 2021 where many motorists are caught off guard and witness their vehicles being damaged by the flood. Secondly, more motorist are now willing to add-on Special Perils coverage due to the reduction in premium. Special Perils rate has been reduced tremendously by more than 50%. From a rate of 0.5% of sum insured to 0.2%. Thus, a vehicle with a sum coverage of RM80,000, the premium for including Special Perils would be RM160.
Many a times, a motorist would opt for the cheapest premium without considering any add-on coverage, not knowing that there are certain events that the standard motor insurance does not cover. When there is a storm or heavy rain and assuming your car was damages due to falling tree, the damage will not be covered under your standard comprehensive insurance, unless you have add-on for Special Perils.
Thus, with the reduction in the premium rate for Special Perils, it is advisable to add-on when you renew your insurance. If you have recently renewed your car insurance and wish to add-on now for Special Perils, you may contact your agent to assist you to pass an endorsement.