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Kuala Lumpur: The gas explosion at Putra Heights on April 1, which destroyed scores of homes, serves as a stark reminder for homeowners to insure their houses as well as the contents inside their homes to mitigate losses from such unforeseen calamities.

The fire that broke out at 8.10am saw flames soaring over 30m high, with temperatures exceeding 1,000°C, destroying residential properties and vehicles within a 500m radius. It took nearly eight hours for the fire to be fully extinguished.

Some 1,254 people from 308 families were affected, with damage to residential properties amounting to some RM65 million.

The tragedy serves as a stark reminder that the unexpected can happen at any time, underscoring the importance of comprehensive insurance to provide financial protection against such unfortunate events.

Here are three types of insurance coverage available for homeowners.

Houseowner policy

According to the General Insurance Association of Malaysia, this is a comprehensive policy that covers the physical structure of the home against risks such as fire, lightning, natural disasters, burst pipes and, yes, even explosions.

Association CEO Chua Kim Soon said that, in the case of the Putra Heights incident, the houseowner policy would cover damage from the explosion, with compensation based on rebuilding costs.

“For claims purposes, they need to obtain written approval from the insurer before proceeding with any house repairs, including emergency work, as unauthorised work may not be covered by the homeowner policy and certificate,” he told Bernama.

Banks typically require homeowners’ insurance as part of the loan agreements for mortgages. For condominiums or apartments, it is mandatory for the joint management body to take out a master policy for home insurance coverage.

A houseowner policy is priced at an average of RM382 per year for flats and apartments, and RM377 for landed properties. The premium price would depend on the sum insured value of the house.

Householder policy

This policy involves the safeguarding of household contents, protecting against loss or damage from incidents such as fire, theft, and certain natural disasters.

Unlike the houseowner policy, which is mandatory when a home loan is involved, the householder policy is optional and can be purchased separately at an average price of RM142. The premium would depend on the sum insured value.

Sadly, householder policies are often overlooked due to a lack of awareness. As a result, many affected homeowners may not be covered in the event of untoward incidents such as the Putra Heights explosion.

Fire insurance

According to Chua, standard or basic fire insurance covers damages from fire, lightning, or explosions caused by gas used for domestic purposes.

“For damages due to an explosion caused by other than domestic gas, an extension in the form of an optional add-on can be purchased,” he said, noting that compensation is based on the rebuilding costs.

Generally, fire insurance is not mandatory for homeowners unless it is required by their banks for housing loans.

Insurance take-up rates

According to the statistics department, out of 9.1 million households in 2024, only 3.88 million fire and home insurance policies were recorded, reflecting a take-up rate of 42.6%.

In comparison, there were 8.88 million households in 2023, with 3.89 million fire and home insurance policies recorded, reflecting a take-up rate of 43.8%.

This, Chua stressed, indicates that more than half of Malaysian households remain unprotected against structural damage caused by fire, floods, severe weather events, and other unexpected incidents.