Making a Property Insurance Claim in Malaysia: Leaks, Fire, Flood and What You Actually Get
The first move on a property insurance claim is not calling an adjuster. It is notifying your insurer immediately, then delivering a written claim within the days your policy allows: on the wordings we read, 15 days on a basic fire policy and 30 days on a houseowner/householder policy. Two different deadlines – do not average them. The harder question is how much you get, because the default basis is insured value or market value, whichever is lower, less wear and tear, less excess – and under-insurance cuts it again.
Short answer
Notify your insurer immediately, then deliver the written claim within the policy deadline: 15 days on a basic fire policy, 30 days on a houseowner or householder policy. BNM’s Claims Settlement Practices rules give non-motor claims an adjuster report in 14 working days, a decision in 7 and payment in 14. The default payout is insured value or market value, whichever is lower, less wear and tear and excess.
Key numbers at a glance
| Basic fire policy | Fire and lightning only (some wordings add domestic gas explosion) |
|---|---|
| Houseowner / householder | Ten standard perils, including flood, windstorm, earthquake |
| Subsidence and landslip | Excluded from both; buy the extension |
| Written claim deadline | 15 days (fire); 30 days (houseowner/householder) |
| Settlement basis | Insured or market value, whichever lower, less wear and excess |
| BNM non-motor times | Report 14 working days; decision 7; payment 14 |
| Insurer's reply to a complaint | Written final decision within 60 days |
| FMOS | Free, cap RM250,000, file within 6 months of the final decision |
Key points in 30 seconds
- A basic fire policy insures fire and lightning only, and on some wordings a domestic gas explosion. Flood, storm and burst pipes are extensions you buy.
- Houseowner (building) and householder (contents) policies carry ten standard perils that do include flood, windstorm and earthquake – but subsidence and landslip are excluded from both and sold back as an option.
- Notify immediately, then deliver the written claim within 15 days (fire) or 30 days (houseowner/householder). A borrower with only the bank-required fire policy has the shorter deadline.
- BNM’s Claims Settlement Practices policy document gives non-motor claims: adjuster assigned in 5 working days, report in 14 working days, decision in 7 working days, payment in 14 working days.
- Under-insure and the average clause bites: a house worth RM800,000 to reinstate but insured for RM500,000 recovers only RM75,000 on a RM120,000 loss.
- Refused or underpaid? Complain to the insurer first (they have 60 days), then take it to FMOS within 6 months – free, binding on the insurer, capped at RM250,000.
Which policy covers what: fire, houseowner, householder
Three policies, three different jobs. Start by working out which one you actually hold – many owners who believe they have “home insurance” hold only the fire policy the bank required.
| Policy | Insures | Perils covered |
|---|---|---|
| Fire policy – what a bank requires on a charged property | The building | Fire and lightning only. One insurer’s product disclosure sheet also puts a domestic gas explosion in the base cover. Everything else is an extension you buy |
| Houseowner | The building: external walls, roof, built-in wardrobes, kitchen cabinets, bathroom fittings, wiring, plumbing | Ten standard perils: fire; explosion; aircraft; impact by specified vehicles or animals; bursting or overflowing of water tanks, apparatus or pipes; theft involving forcible entry; hurricane, cyclone, windstorm; earthquake and volcanic eruption; flood; robbery or hold-up |
| Householder | The contents: furniture, electronics, movable items | The same ten perils |
Flood, storm, subsidence and landslip: what needs an extension?
It depends entirely on which policy you hold. Flood is standard on a houseowner/householder policy and an extension on a fire policy. Subsidence and landslip are excluded from both.
| Risk | Basic fire policy | Houseowner / householder |
|---|---|---|
| Fire, lightning | Covered | Covered |
| Flood | Extension needed | One of the ten standard perils |
| Hurricane, windstorm, earthquake | Extension needed | One of the ten standard perils |
| Bursting or overflowing water tanks and pipes | Extension needed | One of the ten standard perils |
| Subsidence and landslip | Excluded; buy it back | Excluded; buy it back (Etiqa sells it as Optional Benefit No. 9; MSIG requires a special questionnaire) |
The wordings go further: houseowner/householder policies exclude subsidence and landslip except where caused by earthquake or volcanic eruption, and they also exclude flood damage that arises from subsidence or landslip. So a hillside house can be fully insured for fire and flood and carry no cover at all for the risk that actually threatens it. Check the ground before you buy: flood and hillslope risk checks.
For scale: PIAM puts 2024 flood-related insured losses at RM933.4 million (2023: RM755.4 million), of which housing losses were RM372.2 million, more than double the previous year.
The average clause is arithmetic, not a penalty. Insure at 62.5% of rebuilding cost and a RM120,000 loss pays RM75,000 – you absorb RM45,000, and it bites hardest on the partial losses owners assume are safely covered. The extra premium for an accurate sum insured is almost always far smaller than that gap. Reading your schedule once a year takes an afternoon.
Ask Louis directly
Send me a photo of your policy schedule and I will tell you whether the sum insured, the perils and the excess leave an obvious gap.
I will go through the three columns on your policy schedule with you – perils, sum insured, excess – and tell you what rebuilding cost figures people use for this type of unit in this area.
How to start a property insurance claim: the notification deadlines
Two separate obligations, two separate clocks. Do not run them together.
- Notify the insurer immediatelyThe fire wording says “forthwith”; the houseowner/householder wordings say “immediately”. A phone call or an email does it. Do not wait for an adjuster, a contractor’s quote, or the management’s report.
- Deliver the written claim within the policy deadlineFire policy: within 15 days of the loss (QBE Enhanced Fire wording, Condition 11), with as particular an account of the loss as is reasonably practicable. Houseowner/householder: within 30 days of the incident, at your own expense, with detailed particulars and proofs (MSIG and Etiqa wordings, identical in substance).
- Theft has an extra stepThe houseowner/householder wordings require you to make a police report immediately.
- Have the supporting documents readyFire Condition 11 entitles the insurer to books of account, vouchers, invoices, bills, documents, proofs and information – and, if required, a statutory declaration as to the truth of the claim.
Is the insurer on a clock? BNM's rules and the loss adjuster
Yes. BNM’s Policy Document on Claims Settlement Practices, issued 1 July 2024 and in force 2 January 2025, binds licensed general insurers, general takaful operators and registered adjusters. A property claim uses the non-motor column:
| Step | Non-motor | Motor | Para |
|---|---|---|---|
| Register the claim | 7 working days | 3 working days | 10.2 |
| Acknowledge to the claimant | 7 working days | 3 working days | 10.3 |
| Reminder if documents not received | 7 working days | Same | 10.9 |
| Assign the assessor or adjuster | 5 working days | 5 working days | 10.11 |
| Adjuster’s report completed | 14 working days | 10 working days | 10.13 |
| Settlement decision | 7 working days | 5 working days | 10.22 |
| Pay a settled claim | 14 working days | 7 working days | 10.29 |
- A repudiation must be in writing, with reasons (para 10.26).
- An insurer may not repudiate on a technical breach immaterial to the loss, or on certain expired documentation (para 10.27).
- A repudiation notice must tell you that you may refer the dispute to the ombudsman within 6 months (para 10.28).
Who appoints the loss adjuster?
The insurer appoints and pays the adjuster – BNM requires the insurer to settle the adjuster’s fee within 7 working days of submission. But an adjuster on a Malaysian general insurance claim must be a registered adjuster, registered under the Financial Services Act 2013 framework and the Order on Adjusters, P.U.(A) 206/2013 as amended by P.U.(A) 468. BNM’s Policy Document on Registration Procedures and Requirements on Professionalism of Adjusters, effective 29 August 2025, imposes fit-and-proper, governance and conduct requirements and provides that adjusting work must be carried out entirely by a registered adjuster’s own full-time adjusting employees.
What that gives you: BNM publishes the register of adjusters on its own site, so you can check who is handling your file. It is one of the few parts of this process you can independently verify.
How much do you actually get? Average, excess and reinstatement
The default is market value, not rebuilding cost
This is the paragraph most owners have never read. Fire Condition 15 says the insurer pays the insured value or the market value, whichever is the lower. The houseowner/householder wordings say the same and define market value as the value at the time of loss less an allowance for wear and tear and depreciation, then less the excess. If you want the house rebuilt without deductions, you have to buy a Reinstatement Value Clause – MSIG’s fire PDS sets the two side by side: market value pays value less wear and tear; reinstatement pays “full cost of repairing the damaged building without any deductions being made for wear, tear or depreciation”.
The average clause: what under-insurance does
Fire Condition 18 says that if the property is worth more than the sum insured, the insured is “his own Insurer for the difference” and bears a rateable proportion of the loss. The houseowner/householder wordings do the same, and Etiqa’s applies it separately to each insured item. The formula is payable = loss x (sum insured / full value).
| Sum insured RM500,000 (reinstatement value RM800,000) | Sum insured RM800,000 | |
|---|---|---|
| Adequacy | 62.5% | 100% |
| After average | RM120,000 x 500,000 / 800,000 = RM75,000 | RM120,000 |
| Flood excess (1% of sum insured or RM200, whichever is lower) | RM200 | RM200 |
| Paid out | RM74,800 | RM119,800 |
| You absorb | RM45,200 | RM200 |
A RM45,000 gap, entirely from an out-of-date sum insured. And average bites hardest on partial losses – exactly the losses owners assume are comfortably inside their cover.
Excess and betterment
- MSIG’s houseowner/householder wording: first RM50 on bursting or overflowing of water tanks, apparatus or pipes; on hurricane, cyclone, windstorm, earthquake and volcanic eruption and flood, 1% of the total sum insured or RM200, whichever is lower. Note the direction – that clause caps the excess, unlike most.
- Etiqa’s wording simply refers to “the Excess amount stated on the Schedule”, so the number is insurer-specific. Read your own schedule.
- Betterment: there is no published Malaysian betterment scale for property. The 0% / 15% / 40% schedule in BNM’s policy document (Appendix III, paras 11.16 and 11.18) is motor only. On a property claim the equivalent mechanism is the market-value wear-and-tear deduction above, set by the policy wording rather than by a BNM table.
- Also motor-only: para 12.3(c), which stops an insurer applying average on a partial loss where the consumer insured at the value the insurer recommended. That protection does not extend to a house.
Want to see what you can actually buy?
The rules are above; these are the actual homes. Each page lists the projects I am tracking, with published price ranges and the date each figure was checked. Tell me the area on WhatsApp and I will send the current list.
Strata: the master policy versus your own cover
A strata parcel is insured in two layers, and most owners only know about one of them.
| Who buys it | Covers | Does not cover |
|---|---|---|
| The management body (developer in the pre-JMB period, then JMB, then MC): the master policy | Structure and common property – pathways, gardens, wiring, lifts, pools, car parks, walls, windows, ceilings, floors, permanent fixtures, outbuildings | Anything inside your parcel |
| You | Contents (householder), your own renovations and fixtures, loss of rental income if you let the unit | Common property |
The legal basis: section 93 of the Strata Management Act 2013 requires any person or body with a duty to maintain and manage a building to insure it under a damage policy against fire and the other prescribed risks, and to keep it insured – which catches the developer during the pre-JMB period, the JMB and the management corporation. On a law firm’s reading of section 94, the building must be insured for at least its replacement or reinstatement value, and the policy must cover rebuilding, repair, debris removal and professional fees. What the Act does not set is a revaluation timetable, so whether the sum insured has kept up with today’s rebuilding cost is a management decision rather than a statutory one: ask at the AGM what the master policy’s sum insured is and whether it would still rebuild the block – if it is short, the average clause above cuts every payout under that policy, including yours.
Water coming through the slab from the unit above: who pays?
On the repair side, the law is clear. Regulations 55 to 67 of the Strata Management (Maintenance and Management) Regulations 2015 govern inter-floor leakage and party-wall damage:
- The affected owner gives written notice to the developer, JMB or MC.
- Inspection “as soon as practicable or within seven days from the date of receipt of the notice”; seven days’ written notice before entering another parcel, waived in an emergency.
- Form 28, the Certificate of Inspection of Inter-Floor Leakage, is issued within five days of the inspection, stating the cause and the responsible party.
- Four outcomes: defective workmanship or materials within the defect liability period – claim against the developer; a common property defect within the DLP – claim against the Common Property Defects Account; caused by a parcel owner – that owner rectifies within seven days, failing which the management may enter, do the work and bill them; common property after the DLP – the developer, JMB or MC rectifies within seven days.
- Refusing access is an offence: a fine up to RM50,000, imprisonment up to three years, or both.
- Disputes go to the Commissioner of Buildings for determination, then the Strata Management Tribunal (up to RM250,000) or a civil suit.
One gap that catches owners out: houseowner/householder exclusion lists include unauthorised renovations, and by-law 27 already requires prior written management approval to renovate. Renovating without approval can be a by-law breach and an insurance gap at the same time. See renovation permits and strata by-laws.
If the insurer refuses or underpays: FMOS and BNM
- Complain to the insurer firstThis step is compulsory. The insurer has 60 days to give you a written final decision.
- Take it to FMOSThe Financial Markets Ombudsman Service was established on 1 January 2025, consolidating the former OFS and SIDREC under Bank Negara Malaysia and the Securities Commission. It is free and handles direct financial losses up to RM250,000, with no separate limit by product type and no minimum claim.
- Watch the six monthsFile within 6 months of the insurer’s final decision – or, if the insurer does not respond, within 6 months from 60 days after your original complaint. Claims remain subject to the Limitation Act 1953.
- Understand what a decision doesAn FMOS decision is binding on the member insurer, not on you. Accept it and it becomes a binding settlement; refuse it and you keep your right to go to court.
What FMOS will not take (selected): amounts above RM250,000; general or product pricing, fees and charges, product features, and lending decisions; matters already in court or arbitration; complaints filed after the six-month deadline; a matter FMOS has already decided, absent new evidence; product performance disputes, except where non-disclosure, misrepresentation or mis-selling is alleged; third-party bodily injury or death claims.
BNM’s own channels – BNMLINK at the counter, eLINK online and TELELINK by phone – take enquiries and conduct complaints. BNM does not adjudicate the amount of your claim; a monetary dispute goes to FMOS. If you are unsure which route applies, eLINK is a reasonable place to ask.
The documents and photos to keep before anything goes wrong
How smoothly a claim runs is mostly decided before the loss. This list costs you one afternoon.
- Your policy schedule and the full policy wording, saved as PDFs. Three things to read: which perils, what sum insured, what excess.
- The basis of your sum insured. For strata, the management body’s most recent reinstatement valuation; for landed, a rebuilding-cost estimate or a valuer’s figure. Not the market price, and not what you paid.
- Photos and video of every room, taken before anything happens – including kitchen cabinets, air-conditioners, water heater, distribution board and flooring. PIAM’s advice after the April 2025 Putra Heights fire was the same: document the damage before cleaning up.
- Renovation approvals and invoices: the management’s written approval, the contractor’s agreement, payment receipts. An unapproved renovation can be both a by-law breach and an insurance exclusion.
- Purchase receipts for big-ticket contents – appliances, furniture, computers. Digital receipts count.
- The master policy details: insurer, policy number, claims contact. Ask the management office once and keep it.
- Your bank’s details: on a mortgaged property the bank is the loss payee on the fire policy, so it has to be told.
- Three documents after the event: police report (compulsory for theft, useful otherwise), fire brigade report for a fire, and repair quotations.
Related questions
Do I need both a fire policy and a houseowner policy?
It depends on the property. On a landed home they do different jobs: the fire policy is the bank’s requirement and covers only fire and lightning, while houseowner cover brings in flood, windstorm, burst pipes and theft with forcible entry as standard. In a strata block the structure is on the management body’s master policy, so what you buy is householder cover plus your renovations, and loss of rent if you let it. Easiest check: read the perils column on your schedule.
I have renovated. Should I raise my sum insured?
Yes. The sum insured should follow rebuilding cost, not market price and not what you paid. Renovation raises the cost to reinstate, and if the sum insured stays put, the average clause cuts your payout proportionally. One more point for strata owners: renovation needs prior written management approval under by-law 27, and “unauthorised renovations” appears on insurers’ exclusion lists – so skipping approval can cost you twice. See renovation permits.
If I rent out my unit, who insures the tenant's belongings?
Each side insures its own. The owner covers the building, the renovations they paid for and loss of rent; the tenant buys householder cover for their furniture, appliances and personal items. An owner’s policy does not extend to a tenant’s possessions simply because the unit is let. Put the split in the tenancy agreement and keep a dated inventory at handover. See renting out your property.
Can I disagree with the loss adjuster's report?
Yes. The adjuster is appointed and paid by the insurer, but must be a registered adjuster on BNM’s public register, so you can verify who prepared it. Put your disagreement in writing with evidence – photos, quotations, invoices – and ask for a written response. If the claim is repudiated, BNM requires the insurer to give reasons in writing, and you can then take the dispute to FMOS.
Frequently asked questions
How long does a property insurance claim take in Malaysia?
BNM’s Claims Settlement Practices policy document sets non-motor deadlines: the adjuster is assigned within 5 working days, the report is completed within 14 working days, the settlement decision comes within 7 working days, and a settled claim is paid within 14 working days. Those are limits on each step, not a promise on the whole file, and they run only as fast as your documents arrive. No official average claim duration is published in Malaysia, so treat any “usually X weeks” figure as one firm’s experience.
I only have the fire insurance my bank required. Does it cover flood?
No, not unless you bought the flood extension. A basic fire policy insures fire and lightning, and on some wordings a domestic gas explosion. PIAM says most standard policies exclude natural disasters unless specially extended, and puts the extension at “as little as RM14 a month for a building insured for RM200,000”. Houseowner and householder policies are different: flood is one of their ten standard perils.
What is the difference between houseowner and householder insurance?
Houseowner insures the building – external walls, roof, built-in wardrobes, kitchen cabinets, bathroom fittings, wiring and plumbing. Householder insures the contents – furniture, electronics and movable items. Both carry the same ten insured perils. An owner-occupied landed house usually needs both. In a strata block the structure sits under the management body’s master policy, so what you buy is householder cover, plus your renovations and, if you let the unit, loss of rent.
Can the insurer pay less because my sum insured is too low?
Yes – that is the average clause. Payable = loss x (sum insured / full value). A house that costs RM800,000 to reinstate but is insured for RM500,000 is 62.5% adequate, so a RM120,000 loss pays RM75,000 before excess. The wordings apply average from the first ringgit of under-insurance; there is no 85% buffer in either tariff wording we read. Set the sum insured on rebuilding cost, not market price or what you paid.
Does home insurance in Malaysia cover landslide or subsidence?
Not as standard. The houseowner/householder wordings exclude subsidence and landslip except where caused by earthquake or volcanic eruption, and also exclude flood damage arising from subsidence or landslip; a fire policy covers only fire and lightning anyway. You have to buy it back – Etiqa sells it as Optional Benefit No. 9 and MSIG requires a special questionnaire form. This matters most for hillside properties.
Water is coming through my ceiling from the unit above. Who pays?
For the repair, Regulations 55 to 67 of the Strata Management (Maintenance and Management) Regulations 2015 decide: written notice to the management, inspection within seven days, and Form 28 issued within five days of the inspection naming the cause and the responsible party. The insurance side is unsettled – no Malaysian authoritative source states whether your own policy responds to water originating in a neighbour’s parcel. Run both in parallel and notify your insurer within the policy deadline.
What can I do if my insurance claim is rejected?
Complain to the insurer first; it has 60 days to give a written final decision. Then refer the dispute to FMOS, the Financial Markets Ombudsman Service established on 1 January 2025 – free, for direct financial losses up to RM250,000, and you must file within 6 months of the final decision. An FMOS decision binds the insurer but not you, so refusing it leaves you free to go to court. BNM’s eLINK and BNMLINK handle enquiries and conduct complaints but do not decide the amount.
Sources & verification
- QBE Malaysia — Enhanced Fire Insurance Policy wording (operative clause; Conditions 11, 15, 18)
- MSIG Insurance (Malaysia) — Fire Insurance Product Disclosure Sheet (extensions; market value vs reinstatement)
- MSIG Insurance (Malaysia) — Houseowner/Householder policy wording HHO_20250101
- Etiqa — Houseowner and Householder Insurance policy wording
- Bank Negara Malaysia — Policy Document on Claims Settlement Practices (issued 1 Jul 2024, in force 2 Jan 2025)
- Bank Negara Malaysia — Claims Settlement Practices landing page
- Bank Negara Malaysia — Policy Document on Registration Procedures and Requirements on Professionalism of Adjusters (29 Aug 2025)
- Bank Negara Malaysia — Register of registered adjusters
- Financial Markets Ombudsman Service (FMOS) — Our scope
- FMOS — Filing a complaint: what to expect
- FMOS — Annual Report 2025
- PIAM — Stronger Storms Ahead: How Malaysians Can Prepare for the Monsoon (14 Nov 2025)
- PIAM — Insurance data (2025 industry figures)
- MahWengKwai & Associates — Inter-floor leakage and party wall damage in strata schemes (Regulations 55-67, Form 28)
- Form 28 — Certificate of Inspection of Inter-Floor Leakage (published by MPPD, COB unit)
- Low & Partners — Strata Management Act 2013, Part 3 (ss.93-94, duty to insure)
- Bank Negara Malaysia — BNMLINK / eLINK enquiry and complaint portal
- Malay Mail — PIAM on filing claims after the Putra Heights blaze (2 Apr 2025)
Verified: 2026-09-20. This guide is general information, not legal, tax or financial advice. Rules and rates change — confirm in writing with your lawyer, bank or the relevant authority before you sign.
More in this stage
Louis Koh
11 years in Malaysian property · Johor Bahru & Kuala Lumpur · English & 中文
I help local buyers and cross-border buyers from Singapore with new and subsale property. Every figure in these guides is sourced; when a rule changes, I update the page and date it.
Stuck on this step? Ask me directly
Send me your situation — new or subsale, budget, state, and where you are in the process — and I will tell you what to do next and what to watch for.
I will go through the three columns on your policy schedule with you – perils, sum insured, excess – and tell you what rebuilding cost figures people use for this type of unit in this area.
Louis Koh · 11 years in Malaysian property · +60 10-906 6685 · replies 9am–10pm MYT