The rainy season is upon us soon. In Singapore, you can expect frequent thunderstorms and rain showers between November and January. Although Singaporeans are no stranger to heavy rainfall, we are often unsure of what to do during floods.
Many car and property owners suffer damage from the floods as a result of heavy downpour. So unless you’re the Nostradamus of flash floods, check your current home and car insurance policies to see if you’re covered. If not, get flood coverage before the next one washes away your savings.
Car insurance: Does it protect against floods?
These so-called “50-Year Floods” have been occurring regularly since 2010 when flooding turned Orchard Road into the world’s biggest commercial “lazy river.” Since then, there’s been major flooding in just about every part of Singapore. In fact, flooding in 2010 alone caused about 23 million dollars worth of damage.
But hey, you’ve got comprehensive coverage, so you’ve got nothing to worry about right? After all, “comprehensive” means you’re covered against every kind of damage up to and including destruction by alien invasion!
If you’ve got that view of your policy, you’re in for a rude awakening for the following reasons:
- Comprehensive coverage does not cover every kind of damage.
- Your comprehensive car insurance policy may not include flood damage.
- For many car insurance policies you’ll need to pay an additional premium for a flood damage extension to your policy.
So unless you drive a duck boat to work, it’s a good idea to go over your car insurance policy today to see if you’re protected against flood damage. And if you’re not covered you should be before the rains come again.
Because if you wait until you’re sitting in your vehicle with water up to your feet to call your insurer to change your policy, it’s too late. Plus, if your car is a total loss, there goes the entire Open Market Value (OMV) of your car!
So if you’ve got coverage, at least you’ll be able to claim your car’s OMV up until its death by drowning. Check out car insurance on MoneySmart, if you’re not sure which package is best for you.
Homes & shops: Does your basic fire insurance protect against floods?
How’s that for a confusing headline? As contradictory as it sounds, some home owners assume that they’re protected against flood damage because they have basic fire insurance.
It’s that same false sense of security that keeps many car owners from buying the coverage. But if you’ve read my previous article on fire insurance, you already know that basic fire insurance ONLY covers the cost to rebuild/repair any damage to the structure of the building.
So if you’re living in a low-lying area that’s a few inches of rain away from being a lake, look into getting a home content insurance policy that’ll protect your possessions. It isn’t just landed home owners in flood-prone areas that have to worry – even those living in HDBs can find their belongings damaged by rainwater overflow from the roof or seepage from corridors.
There are two kinds of coverage offered by home content insurers that protect against flood damage:
Insured Perils: This policy goes beyond basic fire insurance by covering damage to your possessions resulting from fire, lightning, explosions, vehicle/aircraft impact, theft by forcible entry, and natural disasters (including flooding).
All Risks: This policy goes beyond the basic insured perils by offering broader coverage that even protects against accidental damage you cause (i.e. playing Wii and throwing the controller into your 48’’ Smart TV).
How do you get flood insurance coverage?
Getting flood insurance coverage for your car and home isn’t that tough. Even if your current insurance policy doesn’t have it flood coverage, chances are that your insurer provides either a special plan or policy extension that has it.
Also, if you are interested in making sure your car is well protected, you can check out sites like MoneySmart that allow you to compare different car insurance packages and choose what is best for you!
Have you ever made an insurance claim due to flash floods? Let us know in the comments below.