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September 29th, 2009 11:42 AM #11
http://business.inquirer.net/money/b...ver-act-of-God
Most car insurance do not cover ‘act of God
MANILA, Philippines -- Amid the damage caused by floodwaters to hundreds -- maybe thousands -- of vehicles by typhoon “Ondoy” (international codename: Ketsana), auto insurance
firms are bracing for a deluge of claims from policyholders over the next few days.
Yet, vehicle owners who think that a “comprehensive” automobile insurance policy would insulate them from further financial losses may be in for a nasty surprise.
According to officials of insurance firms, only the claims of policyholders who availed of additional coverage against “acts of God” or “acts of “nature” can expect to be reimbursed for the repair or replacement of their cars.
Emmanuel Que, executive vice president of the Philippine Charter Insurance Corp., said many clients did not avail of insurance coverage for "acts of God" or nature.
“Normally, if you have coverage for acts of God, [repair for] flood damage would be covered,” Que said. “Unfortunately, this is not something clients normally avail of.”
He explained that, in most cases, people who availed of automobile insurance paid only for policies that covered normal vehicular accidents, “own damage” or theft.
“Those are the more popular ones,” he said, adding that few vehicle owners even considered so-called policy “riders” for acts of God because of the sheer rarity of these incidents.
“With ‘acts of God’ policies, a car owner will be protected against damage caused by typhoons (which includes flooding), earthquakes or anything induced by nature like a falling billboard or a falling coconut,” Que said.
But the insurance cover does not come cheap, averaging about 0.7 percent of the vehicle’s insured value per year.
For a P1-million car, this would translate to an additional P7,000 in insurance costs, on top of the P28,000 comprehensive annual premium for brand new units.
As early as Monday morning, auto insurers have already been getting calls from clients indicating the impending filing of insurance claims.
“Right now, we’re getting a lot of notices of loss,” said UCPB General Insurance Co. Inc. claims head Francis Nob in a telephone interview. “What [clients] are saying right now is that they intend to file a claim.”
“What will happen next is that our assessors will check our records if they have policies that cover flood damage,” he added.
He pointed out that policyholders who bought additional coverage for “acts of God” can expect immediate action, but those without this may be in for more heartache.
“If they have none, we will politely tell them,” Nob said, acknowledging the difficulty of breaking bad financial news to clients who may have lost all their belongings in the flood.
Even as he noted that few clients have actually availed of acts of God policies, he said his firm has already notified auto dealerships and accredited repair shops to expect a flood of clients to have their vehicles repaired.
Even those who had enough foresight to avail of “acts of God” coverage, however, will have to make do with a repaired vehicle instead of expecting insurers to replace their cars with new ones.
“The liability of the insurer is to restore unit to its condition prior to damage,” Nob said. “The insurance firm has the right to restore it.”
Echoing this position, Philippine Charter Insurance’s Que said repairs on flood-damaged vehicles would normally revolve around replacing damaged interiors and restoring electrical systems -- repairs that could cost insurers about P50,000 per vehicle.
“If the car’s computer box has been damaged, that would cost maybe an additional P50,000,” he said. “The important thing is that one should not try to start the [flood-damaged] vehicle. As long as you don’t try to start it, it can be repaired.”
UCPB’s Nob does not expect a sharp increase in claims payouts for auto insurance policies.
He noted, however, that insurance firms may have to adjust their rates henceforth, now that the “unlikely” event of massive flood damage around Metro Manila has become a reality.
“We may see higher premiums in the future,” he said. “This event means a lot to the industry as a learning experience.”
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September 29th, 2009 01:40 PM #12
To answer you the best of my knowledge:
1/3) Yes! AOG has a premium related to the value of your vehicle. If your car is under a 'PC - Private Car' Category for which sedans and alike has a .5% rate. i.e. 2009 Toyota Corolla Altis J 8000,000 * .5% = 4,000.00. For 'CV - Commercial Vehicle' rate applied is 1%. i.e 2009 Mitsubishi Adventure 820,000 * 1% = 8,200.00.
The said amount will be added onto your original comprehensive insurance + corresponding taxes computed from AOG.
2) This was included from the very first introduction of CAR INSURANCE.
4) Not all are covered or I may say be covered. The underwriter will check first the postal/given address of the unit owner. If the underwriter finds the location is too risky, they will not advise the insurer to include this coverage.
HTH.
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September 29th, 2009 04:30 PM #13* autokraft and huer77
thanks for shedding some light on the issue.
well i guess many policy holders will now be asking about this AOG clause after what happened this weekend. too bad for somebody close to me whos innova and captiva went under.
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September 29th, 2009 04:32 PM #14
i guess hindi na magiging free yang AOG clause after this.. baka itaas pa nila premium nyan.. last 2 years.. nakuha ko lang as free add on yang AOG eh..
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September 29th, 2009 05:23 PM #15
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September 29th, 2009 05:34 PM #16
Addenddum to No. 1.) No. Some insurance companies as 'a come on' to the customers, they included this coverage for FREE. But the truth is, they charged you higher for the OD/TH (PC policies average rate is around 2.3 of your TSI and CV policies average rate is 1.5).
Addendum to No. 2.) Your agent should tell you about this additional coverage aside from the REGULAR COMPREHESIVE COVERAGE. Normally, they do not bother to include this as this will entail you cost (that you tend to turn down coz this will only balloon your premium). Though, these agent will get a 25% commission hehehehe.
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September 29th, 2009 05:45 PM #17
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September 29th, 2009 06:04 PM #18
Buhay na buhay ang BGC this evening. Bukas halos lahat ng restaurants. Sabi pa nung isang cashier...
Traffic!