Introduction of flood insurance and flood hazard map in Kota Bahru, Malaysia

Abstract

Flooding is the most severe hazard in Malaysia, particularly the seasonal monsoon floods which normally affect the east coast of Peninsular Malaysia, Sabah and Sarawak. Every year, the Malaysia Government spends a large amount of money to mitigate the losses caused by floods. Generally, the flood insurance coverage in Malaysia is more common for vehicles but not so popular for properties, buildings and businesses. However, in the U.S., the government introduced the National Flood Insurance Program (NFIP) to be part of their flood risk management. Under the NFIP, flood maps have been used to determine whether it is mandatory for an individual or a business to have flood insurance. In Malaysia, the introduction of flood insurance and flood hazard map are strongly recommended due to the seasonal monsoon and unexpected climate change which can cause flood without any warning sign. In this paper, a case study was conducted for Kota Bahru, Malaysia. Flood hazard maps for Kota Bahru was presented by using Geographic Information System (GIS). We also simulated a flood hazard map for Kota Bahru, under the climate change scenario when more rain is expected in the future. We observed that more areas are exposed to high flood risk under that scenario and appropriate actions are needed to be taken to assist the residences at that area to prevent future flood losses. One of the methods is to include flood insurance for Kota Bahru, especially for its high flood risk area. The equivalence principle method and subsidies from the Malaysia Government has been suggested in our flood insurance premium calculation to ensure the premium is affordable for Kota Bahru residences.