Key takeaways
- A basic fire policy covers only fire, lightning and domestic explosion; houseowner insurance covers the building and usually flood, windstorm and burst pipes; only householder insurance covers your furniture and belongings.
- Your bank may make fire insurance a condition of your housing loan, but under Bank Negara Malaysia rules it must tell you that you need not buy from its panel insurers, and it cannot buy a panel policy for you without your written consent.
- Insure the building for what it costs to rebuild, not the loan balance or market price: in PIAM's example, a house that costs RM500,000 to rebuild but is insured for RM300,000 gets only RM60,000 for a RM100,000 flood loss.
- PIAM said on 6 November 2026 that only about 28% of fire and motor policies in the central region carry flood cover, and that many homeowners insure only the building to meet the bank's requirement.
- In condos, the management body must insure the building for at least its reinstatement value under the Strata Management Act 2013, but your furniture and belongings are yours to insure.
- After a loss, tell your insurer at once and submit the claim form and documents within 30 days of the incident, according to PIAM's home insurance consumer guide.
Basic fire, houseowner or householder: what is the difference?
What people call "home insurance" or "house fire insurance" can be three quite different policies. The consumer education site InsuranceInfo sorts them like this:
| Policy | What it insures | Typical perils | Who it suits |
|---|---|---|---|
| Basic fire | The building, and contents if you add them | Fire, lightning and domestic explosion only | The least cover at the lowest cost; some fire policies bought with a housing loan are this kind, so read yours |
| Houseowner | The building: house, walls, roof, fixtures, garage, fences and gates | Fire, lightning, explosion, aircraft, impact by vehicles or animals, burst or overflowing tanks and pipes, theft with forcible entry, windstorm, earthquake, flood | Owners of landed homes |
| Householder | Furniture, appliances, clothes and personal belongings | Much the same perils as houseowner, applied to your things rather than the building | Owners and tenants |
PIAM's Home Insurance consumer guide (September 2026) lists the perils a standard houseowner and householder policy usually covers: fire, lightning, domestic explosion, aircraft damage, impact by road vehicles or animals, burst or overflowing water tanks and pipes, theft with forcible and violent entry, robbery and hold-up, hurricane, cyclone, typhoon or windstorm, earthquake or volcanic eruption, and flood, but not loss caused by subsidence or landslip. An excess applies to windstorm, earthquake and flood claims.
A standard policy also carries small extra benefits, such as loss of rent (10% of the total sum insured), liability to the public (limit RM50,000) and contents temporarily removed (15% of the contents sum insured). Limits differ between policies, so check your own schedule.
The short version: houseowner covers the house, householder covers what is inside it. InsuranceInfo notes that owners are usually advised to buy both, because a householder policy does not cover the building and a houseowner policy does not cover your furniture.
Is the fire insurance my bank arranged enough?
When you take a housing loan, the bank usually asks for fire insurance, sometimes adding the premium to the loan, and many owners never see the policy. Bank Negara Malaysia's Prohibited Business Conduct policy document (15 July 2016) allows a bank to require fire insurance for home financing, but it also says the bank may quote its panel insurers while you must be allowed to use a non-panel insurer. BNM's Product Transparency and Disclosure policy document of 2 December 2024 goes further: the bank must state what insurance and cover the loan requires, tell you that you are not obliged to buy from its panel, and not buy a panel policy on your behalf without your express written consent.
The problem is rarely whether you have a policy. It is what the policy is:
- The sum insured follows the loan. InsuranceInfo warns that when the bank buys fire insurance for you, the sum insured may depend on your loan balance. Its example: a loan balance of RM100,000 against a rebuilding cost of RM700,000.
- It may be a basic fire policy. In a case from the annual report of the OFS (the predecessor of today's FMOS), a homeowner's fire policy was bought with her loan, with no proposal form and without the storm and tempest extension. When a windstorm damaged her roof, the claim was rejected, and the Ombudsman upheld the insurer because the policy did not cover that peril.
- It covers the building only. PIAM's chief executive said on 6 November 2026 that many homeowners insure only the building to meet the bank's requirement, leaving furniture, appliances and belongings unprotected.
A 10-minute check of your bank fire policy
- Ask the bank for the policy schedule, or find your yearly renewal notice.
- Read the policy name: Fire (basic), or Houseowner or Householder.
- Compare the sum insured with what your house would cost to rebuild today.
- Look for flood and windstorm in the list of perils, and for subsidence and landslip if you are on a slope.
- See whether contents are insured at all.
- Note the renewal date and how the premium is collected each year.
If you would rather choose your own policy, InsuranceInfo explains that while the loan is outstanding you simply name the bank in your fire policy and give the bank a copy. Ask the bank what cover and amount it requires first, and cancel the old policy only after the new one starts, so there is no gap. For the other policy that comes with a home loan, see MRTA vs MLTA.
Do I need both houseowner and householder? It depends on your home
The answer depends on the type of home, whether you have a loan and whether you live in it or rent it out. This is how I usually lay it out for clients:
| Your situation | Building (houseowner) | Contents (householder) | Watch out for |
|---|---|---|---|
| Landed home with a housing loan | Required by the bank; check the amount and flood cover | Worth considering; banks usually do not ask for it | Sum insured based on rebuilding cost, not the loan balance |
| Landed home, loan fully paid | Your decision; remember to renew | Worth considering | Letting the policy lapse once the bank no longer asks for it |
| Condo or apartment (strata) | Insured by the management body (JMB or MC) for the whole building | Your own policy | Ask the management office what the master policy covers |
| Strata landed home on a land parcel (some gated and guarded houses) | The law makes each owner insure his own building | Your own policy | Assuming the maintenance fee already covers it |
| Landlord renting out a house | The landlord insures the building | Consider it for your own furniture in the unit | Burst pipes while the house is empty are usually excluded |
| Tenant | Not needed; the building is not yours | Your own policy | The landlord's houseowner policy covers the building, not your things |
The condo rules come from the Strata Management Act 2013. Section 93 says the body that maintains and manages a building must insure it with a licensed insurer under a damage policy covering fire, lightning, explosion, burst or overflowing tanks and pipes, windstorms and other events in the policy. Section 94 sets the amount at no less than the reinstatement value, with a valuation by a registered valuer at least once every five years. Section 97 says this does not apply to land parcels: each parcel owner must insure the building on his own parcel.
So if you live in a condo, the building is normally insured already, but your furniture, appliances and belongings are not part of the master policy. Whether renovations and built-in fittings are included depends on the wording of the master policy, so ask the management office.
Does home insurance cover flood? What to check this monsoon
This northeast monsoon began on 27 October 2026 and is expected to last until March 2027; the Ministry of Health said that as of 9 November flood victims in Selangor and Perak were in temporary relief centres (report). At PIAM's Monsoon Readiness Media Roundtable on 6 November, its chief executive said Malaysia suffered close to RM1 billion in flood losses in 2024, much of it uninsured, and gave the share of fire and motor policies with flood cover:
| Region | Fire and motor policies with flood cover |
|---|---|
| East Malaysia | 21% |
| East coast | 29% |
| Central | 28% |
| Northern | 28% |
| Southern | The highest share (no figure given) |
Source: New Straits Times, 6 November 2026. In an interview published on 14 November, he put the take-up of flood cover on fire and property insurance at only about 27% (Kosmo!).
- A basic fire policy does not cover flood. A standard houseowner or householder policy lists flood as a covered peril, with an excess, and without subsidence or landslip.
- Subsidence and landslip, riot, strike and malicious damage, and plate glass usually cost extra. Great Eastern General's GREAT Shield Home product disclosure sheet says the same: these need an additional premium. If your house sits on a slope, check for subsidence and landslip cover in particular.
- Empty homes need care. According to PIAM, a standard policy excludes burst-pipe damage while the home is untenanted, and PIAM lists cover for a home left unoccupied for more than 90 days as an optional add-on. Landlords between tenants, and owners of houses left empty for long periods, should check this.
- Cover does not work backwards. PIAM's chief executive said cover generally starts once the premium is paid, but flood damage that has already happened cannot be claimed, and insurers may decline areas with very high flood risk. Before buying a home, especially a subsale, find out its flood history.
How much should I insure my house for? A worked example
Insure the building for its rebuilding cost, not its market price and not your loan balance. The market price includes land and developer profit, and a fire or flood cannot destroy land. PIAM offers a Building Cost Calculator that gives an indicative rebuilding cost; check it before every renewal, especially after a renovation.
If the sum insured is too low, most policies apply the average clause and pay in proportion. The first column below is the example PIAM's chief executive gave in November 2026; the second is my own hypothetical bank policy:
| Item | PIAM's example | Hypothetical: sum insured equals loan balance |
|---|---|---|
| Rebuilding cost | RM500,000 | RM400,000 (assumed) |
| Sum insured | RM300,000 (60%) | RM250,000 (62.5%, assumed equal to the loan balance) |
| Loss | RM100,000 flood damage | RM80,000 fire damage (assumed) |
| Insurer pays | RM60,000 | RM50,000 |
| You pay | RM40,000 | RM30,000, before any excess |
| If the house is destroyed | At most RM300,000 | At most RM250,000, RM150,000 short of rebuilding |
The second column only shows the arithmetic; its figures are assumptions, not a quote or a promise from any policy.
Check the basis of settlement too. The GREAT Shield Home product disclosure sheet explains that you can insure the building on a reinstatement value basis (new for old): if the sum insured is adequate, repairs are paid without deduction for wear and tear, and the cover includes architects' and surveyors' fees, debris removal and the cost of meeting new building by-laws. On a market value basis, depreciation is deducted. Some package policies work on a first loss basis instead: GREAT Home 360, for example, fixes the sum insured by the plan you choose and does not penalise you for under-insurance.
For contents, go room by room and estimate what it would cost to replace everything. PIAM's guide adds two rules: declare separately any single item worth more than 5% of the contents sum insured (furniture, pianos, appliances, TVs and hi-fi excepted), and gold, silver and platinum articles, jewellery and furs together must not exceed one third of the contents sum insured.
How do I claim on home insurance? Steps, documents and common mistakes
PIAM's consumer guide sets out the steps:
- Notify your insurer, or your agent, immediately, with the nature and extent of the loss.
- After a break-in, make a police report immediately.
- Photograph the damage, the damaged items and the point of entry before you clean up.
- Submit the claim form and all supporting documents within 30 days of the incident.
- Cooperate with the loss adjuster your insurer appoints.
| Document | Notes |
|---|---|
| Claim form | From the insurer, completed and signed |
| Written statement | Describing the items lost or damaged |
| Repair estimate | For damage to the building |
| Invoices, receipts or valuation reports | For stolen or damaged items |
| Photographs | Especially if no adjuster is appointed |
| Final repair or replacement bills | Once the work is done |
How the excess works: in PIAM's burst-pipe example, the repair costs RM2,000, your excess is RM50 and the insurer pays RM1,950.
The mistakes I see most often: cleaning up before taking photos, agreeing to settle when someone makes a liability claim against you (PIAM says to contact your insurer first), and sending documents after the 30 days. For flood claims in detail, see the flood insurance claim guide. Great Eastern General policyholders can call the claims line 1300-1310-88 listed in its product disclosure sheet.
Want your home cover checked? How I can help
I look after families across Kuala Lumpur and Selangor, including terrace house and condo owners in Puchong, Seri Kembangan, Serdang and Cheras. Send me your policy schedule and I will:
- tell you which kind of policy your bank arranged, its sum insured, and whether flood and windstorm are covered;
- help you estimate a sensible building sum insured from the rebuilding cost rather than the loan balance;
- for condo owners, look at what is left outside the management body's master policy;
- if you need it, arrange houseowner or householder cover with your bank named on the policy;
- help with the documents and follow-up if you ever need to claim.
If your current cover is already enough, I will say so, with no hard selling. For homes, shops and factories, see my fire insurance page, or book a free policy review to look at the whole family's cover in one go.
This guide is general information, not legal advice; your cover and limits are set by your own policy wording.