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only two million out of eight million homes in the country are insured

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LAST YEAR, about RM3.31bil worth of property was destroyed in fire-related incidents, according to statistics from the Fire and Rescue Department.

What is even more alarming is that only two million out of eight million homes in the country are insured, said its director-general Datuk Mohammad Hamdan Wahid.

“Many people think such a disaster will not happen to them, but statistics do not lie,” he said during a media forum in Kuala Lumpur recently.

He said the 6,301 cases the department dealt with last year was because of human error and ignorance on the causes of fires.

These included short circuits from old wiring, overloading electrical appliance usage, indiscriminate disposing of cigarette butts, smoking in bed and usage of candles, were the main contributors behind structural fires.

Mohammad Hamdan said this was compounded with low awareness on the need for fire detection and extinguishing systems and escape procedures.

“People barricade their homes with grilles for security with no thought of how they can escape in the event of an emergency.

“Many do not have fire extinguishers at home. They think they can rely on the fire department to put out a fire.

“They don’t realise that initial action can save lives and property from extensive damage or loss,” he said.

Due to the current scenario, he strongly advised people to obtain fire insurance coverage.

When it comes to property, Allianz Malaysia chief executive officer Zakri Khir said one reason why fire insurance gets sidelined is because most people think their properties are already “protected” as fire insurance is a compulsory requirement by most banks during the financing of a property loan.

“But they forget that the insurance policy expires once the loan is paid.

“If there is a fire after this, all the monthly payments will have come to naught, and they have to start all over again,” said Zakri.

It is important that homeowners understand the need for an insurance policy that provides cover for flood, burst pipes, fires, lightning, explosions and theft, said Rehda president Datuk Soam Heng Choon.

Soam advised owners to guard themselves against unwittingly buying overlapping insurance policies.

“For high-rise properties, it is compulsory for the management committee (MC) to have a master fire policy to insure the building.

“Most owners do not know they can ask for a copy and show this to the bank when applying for a loan, so that they do not have to pay a second time for another fire insurance policy in their financing plan.

“But to show the property is actively protected, a fire report must be submitted yearly to the bank or financial institution,”

he said, adding that fire policies from banks and MCs only insure the building structure, not its contents.

To emphasise the impact of losing one’s personal belongings, Allianz General Insurance Company chief sales officer Horst Habbig cited having to replace the wardrobe or kitchen.

“If the building is already covered, then buy insurance for household contents.

“Policies should also cover things like monthly mortgage loan instalments in the event that a house is deemed temporarily uninhabitable after a disaster, and if the property is rented out, repairs and maintenance due to damage caused by tenants,” advised Habbig.