Posted on: 30 September, 2025
Are you a Malaysian Houseowner thinking about protecting your property for the first time? With unpredictable weather, frequent floods, and even tech-savvy break-ins on the rise, having the right home insurance is more important than ever. Yet, about half of Malaysian households still do not have home insurance or takaful coverage, and only around one-quarter carry additional flood protection. This beginner-friendly guide covers everything you need to know about Houseowner and Householder insurance in Malaysia. You'll also learn how strata property insurance works, why flood coverage is essential, and how to avoid common mistakes such as under-insurance. You'll even learn how to use PIAM's Building Cost Calculator and understand what an actual claim process involves. All information is based on Malaysian sources and actual practices by local insurers.
Home insurance in Malaysia typically refers fire insurance policies regulated by Bank Negara Malaysia. These policies provide coverage for damage to your home or personal belongings caused by events such as fire, lightning, burst pipes, impact from vehicles, or burglaries involving forced entry. In Malaysia, home insurance is divided into two complementary types of coverage:
Houseowner insurance provides coverage for the physical structure of your house, including external walls, the roof, built-in wardrobes, kitchen cabinets, bathroom fittings, electrical wiring, and plumbing. This type of insurance is typically required by banks for the entire duration of your mortgage, as it ensures that the property can be rebuilt or repaired in the event of a disaster. Standard policies generally cover fire, lightning, explosion, floods, and impact damage. However, insurers also allow policyholders to add optional coverage for other risks such as landslides/landslips, and accidental water damage. In short, Houseowners Insurance covers all these structural elements.
Householder insurance protects the contents of your home, including movable items such as TVs, laptops, furniture, handbags, and jewelry. Most conventional policies operate on an indemnity basis, meaning claims are settled according to the current value of the item after depreciation. Selected insurers (e.g., Securehome) may offer first loss coverage up to RM150,000, which provides broader protection. Guidelines on Householder cover and item limits provide detailed information.
If you live in a condominium or apartment, it’s important to understand how insurance works for strata properties. According to Section 43 of the Strata Titles Act 1985, the building's Management Corporation (MC) is required to purchase a master Houseowner Insurance policy that covers the entire structure and common areas of the building. However, this master policy typically does not extend to the interior of an individual unit. If you have upgraded your unit - for example, by installing premium flooring or custom kitchen cabinets - you’ll need to obtain additional coverage for these "building improvements" under your own Householder Insurance policy. This helps you avoid any coverage gaps or duplicate insurance costs.
Most Malaysian home insurance policies provide coverage for damage or loss caused by:
Landslide protection may be included in comprehensive plans or purchased as optional add-ons. Flood coverage, while part of the basic perils, gained renewed attention after the severe December 2021 floods (RM6.1 billion in losses, RM1.6 billion to homes), highlighting the importance of adequate protection for landed properties in high-risk areas such as Hulu Langat, Kuala Selangor, Kemaman, and Kuantan.
What's Not Covered: Most home insurance policies do not cover:
Note: Always review your policy for the full list of exclusions.
When purchasing home insurance, you should insure your property based on its rebuild cost, not its market value - because land is not subject to damage and is not covered by insurance. To help you calculate an appropriate sum insured, PIAM offers a free Building Cost Calculator online. By entering details such as your built-up area, number of storeys, and finish quality, you can get an estimated rebuild cost. This estimate typically includes demolition costs and professional fees.
Example:
A double-storey terrace house in Shah Alam with a built-up area of 1,800 square feet:
If you under-insure your home, the Average Clause (or Average Condition) will apply. This means any claim payout will be reduced in proportion to the level of under-insurance.
Example:
If your home should be insured for RM500,000 but you only insure for RM400,000 (80%), and you have RM100,000 in damage, you would receive only get RM80,000 from the insurer instead of the full RM100,000.
For heritage properties or wooden kampung houses, standard calculators might not provide accurate estimates. In such cases, you should obtain a professional valuation to ensure adequate and accurate coverage.
To ensure a smooth and stress-free claims process, please follow our official Tokio Marine Home Insurance claim procedures . We provide a clear step-by-step outline of the required documents and tips for accelerating your claim settlement.
With Malaysia’s unpredictable weather and rising construction costs, having adequate home insurance is no longer just about fulfilling bank requirements - it’s about safeguarding your family’s future. Find the right balance - avoid overpaying for unnecessary coverage, but don’t risk under-insuring your home and belongings. Use PIAM’s Building Cost Calculator and review your policy details to ensure you have the protection you need.
The benefit(s) payable under eligible policy is protected by PIDM up to limits. Please refer to PIDM’s TIPS Brochure or contact TMIM or PIDM (visit www.pidm.gov.my).
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