When a 4.1-magnitude earthquake struck Segamat, Johor, on 24 August 2025, many residents were left wondering if their insurance policies would cover the damage. For lawyer Poon Ching Yee, the tremors widened hairline cracks in her Taman Yayasan home, leaving one wall so damaged she could see into her neighbour’s house.

Her bank advised her to submit a claim, as her housing loan was tied to insurance. However, she remains uncertain because the cracks existed before the quake. Whether her claim succeeds will depend on an assessor’s decision.

This case highlights a wider concern: many Malaysians are unsure if their home insurance extends to natural disasters such as earthquakes.

Why Earthquake Insurance Matters

The Segamat quake, along with at least seven aftershocks, has sparked renewed debate about the importance of earthquake coverage. The General Insurance Association of Malaysia (PIAM) noted that public awareness remains low, largely because Malaysia has long been seen as outside major seismic zones.

Malaysia sits away from the Pacific Ring of Fire, which affects countries such as Indonesia and the Philippines. However, the Segamat tremors were linked to the Mersing Fault Zone, proving that seismic risks exist within Peninsular Malaysia.

Limited Coverage And Low Uptake

Most Malaysians only purchase basic fire insurance, often because it is tied to a mortgage. Fire insurance typically covers risks such as fire, lightning, or gas explosions, but it does not include natural disasters.

Houseowner or householder insurance offers more comprehensive protection, covering earthquakes, floods, and windstorms. Yet, uptake remains low. According to the Department of Statistics, Malaysia recorded 9.1 million households in 2024, but only 3.88 million fire and home insurance policies, about 43% of households.

Many homeowners who have paid off their loans, particularly in rural or semi-urban areas, remain uninsured or underinsured.

Costs And Options For Homeowners

Experts say earthquake cover can be added to a standard fire policy for about RM1 per RM10,000 of coverage. For example, a landed two-storey house with a reconstruction cost of RM1 million and contents worth RM200,000 could see annual premiums of around RM4,000 under a householder policy, compared to RM1,500 for fire-only cover.

Condominiums and apartments are usually insured under strata policies, which include earthquake protection. Landed property owners, however, must choose to add such coverage themselves.

Residents Counting The Costs

In Segamat, at least 64 reports of minor damage have been filed, including two at a local surau. Most involve cracks to walls and ceilings that do not compromise structural safety.

Deputy Works Minister Ahmad Maslan confirmed that RM550,000 has been allocated to repair 15 government buildings and schools affected by the quake. Repairs will cover plaster cracks, wall joints, and ceiling damage, with work expected to be completed by year-end.

No lives were lost, and no injuries were reported.

Experts Call For Greater Awareness

Insurance companies have started receiving claims from residents, though the total value of losses is still being assessed. PIAM has urged Malaysians to recognise that earthquakes, while less frequent than floods, are a real risk.

Professor Azlan Adnan, a structural earthquake engineering expert at Universiti Teknologi Malaysia, warned that old fault lines in Peninsular Malaysia could still produce quakes up to magnitude 5.5 or even 6 in a worst-case scenario. He recommended that new developments, schools, hospitals, and homes with active mortgages in risk zones include earthquake coverage by default.

To keep premiums affordable, he suggested that Malaysia explore a national disaster insurance pool, similar to schemes in Japan and the United States.

Looking Ahead: A Shift In Home Protection

For residents like Segamat’s Chew Leh Tong, who holds only fire insurance through his mortgage, the recent quake has been a wake-up call. Cracks in his 10-year-old home are unlikely to be covered, but he is now considering earthquake insurance.

Industry experts believe that earthquake coverage will gradually become a standard safeguard in Malaysia. As seismic activity and other natural disaster risks gain attention, homeowners may need to rethink how they protect their property and savings.

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• TAGS:
• Department of Statistics Malaysia
• DOSM
• Earthquake
• General Insurance Association of Malaysia
• Home Insurance
• Insurance
• Segamat Earthquake