KUALA LUMPUR, June 11 (Bernama) – Malaysia’s general insurance industry is set to expand further in the next few years due to greater awareness of the importance of insurance coverage after the unfortunate Putra Heights gas explosion, which caused extensive damage to homes and properties.

Liberty General Insurance Bhd chief executive officer, Puneet Pasricha (Pasha) said the industry’s expansion would be driven by renewed interest and the rising number of houseowners and householder policies.

According to GlobalData, a leading data and analytics company, Malaysia’s general insurance industry is set to grow at a compound annual growth rate of 7.8 per cent to RM30.5 billion in 2028 from RM22.6 billion in 2024 in terms of direct written premiums (DWP).

“I believe the number will continue to grow as recent events like the Putra Heights pipeline explosion have driven renewed interest and growth in houseowner and householder policy uptake,” Pasha told Bernama in an interview recently.

The Putra Heights pipeline explosion injured 150 people and impacted about 49 houses, with the intense heat from the roaring flames melting cars, motorcycles, plastic pipes, water tanks and CCTV cameras.

The incident has raised awareness of the importance of insuring homes and belongings, and will likely drive general insurance growth beyond forecasts, said Pasha.

“Sadly, it also exposes a harsh reality - many Malaysian homeowners are either underinsured or unaware of the extent of protection they truly need,” he said, highlighting that most Malaysian homes remain uninsured against fires or floods, with comprehensive homeowner policy penetration still low.

Penetration Rate Considerably Lower

While a significant portion of homeowners with mortgages typically have basic fire insurance due to bank requirements, he said the penetration rate for comprehensive homeowner or householder policies that cover a wider range of perils, including fire and floods, is considerably lower.

“This could be due to a lack of awareness about the benefits of comprehensive coverage, the perception that such events are rare and potentially the cost of premiums for more extensive policies,” said Pasha.

Nevertheless, the unfortunate incident highlights the importance of adequate insurance protection—not just for vehicles, but also for homes and businesses.

He said Malaysian homeowners must be aware of the potential hazards and consider broader or comprehensive coverage, as basic fire insurance may not cover damage from explosions or related hazards.

As such, they should periodically review their insurance policies to ensure coverage of potential risks relevant to their location and circumstances.

Emergency preparedness is vital

Emergency preparedness is crucial, and homeowners should have a plan in place — including establishing evacuation routes and ensuring easy access to essential documents — to respond effectively during unforeseen events.

Pasha said that homeowners should either have a homeowner's policy (which covers the structure of the building) or a householder's policy (which protects contents inside the home) to have full protection against explosions, fires and other crises.

For example, he cited Liberty General Insurance’s homeowner policy, which covers disaster relief, sudden impact and unforeseen perils, with add-on benefits.

Sudden impact covers losses or damage to the building caused by aircraft, road vehicles and animals, as well as domestic gas explosions, while unforeseen perils include damage incurred by bursting or overflowing water tanks and pipes, theft or rental loss.

As for condominiums, he said the master building insurance policy held by the management corporation typically covers the structure of the entire building, including the external walls, roof, and common areas.

However, unit owners usually need their own householder's insurance to cover the assets such as furniture and household goods, electrical appliances and kitchen equipment, clothing, personal effects and valuables below, which Liberty General Insurance also offers, said Pasha.

The company also offers additional protection against damage to locks and keys, loss of cash, jewellery, gold and silver articles, breakage of mirrors, rental losses, public liability and theft.

Condominium owners must understand the scope of the master policy and their own insurance needs, said Pasha.

Asked about the necessary procedures in claiming damages, he said the policyholder should report the incident as soon as possible to the police and other relevant authorities, notify the insurer immediately, document the damage by taking clear photographs and videos of the affected property and preserve damaged property for inspection.

Besides this, he said the policyholder should also cooperate with the adjuster, keep records of expenses and familiarise themselves with the terms and conditions of their policy.

Don’t exaggerate insurance claims

Pasha also warned policyholders against several actions that could complicate the claims process, including tampering with evidence, exaggerating claims, delaying reports, disposing of damaged items prematurely, and admitting liability.

He also said policyholders should not make permanent repairs without authorisation before the adjuster has assessed the damage and provided authorisation, noting that claims are typically based on the cost of reconstruction or repairs up to the sum insured.

If the damaged property cannot be reconstructed due to excessive damage, and the policy provides coverage on a reinstatement value basis, the insurance payout would aim to cover the cost of rebuilding a new house of similar size and specifications on the same site, subject to the policy's terms and the sum insured.

However, if the policy is on an indemnity basis (which is less common for total loss of property), the payout would consider depreciation and the current market value of the property, which might be significantly less than the cost of a new building.

As such, Pasha said it was crucial for homeowners to ensure their sum insured is adequate to cover the full cost of rebuilding in case of a total loss.

On whether the insurance payout for damages takes into account the appreciation of the value of the house, he said it depends on the terms of the policy and the basis of settlement.

“They are generally based on the reinstatement value, not the market value. Appreciation of property value doesn’t affect payouts unless the policyholder updates their coverage accordingly.

“As such, it is important to review your sum insured regularly to ensure it reflects current rebuilding costs,” he said.

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