Insurance claims from typhoon damage hit P15B

10/22/2009

Insurers said claims from damage wrought by back-to-back typhoons that hit the country early this month is expected to breach P15 billion from an earlier estimate of P12 billion.

National Insurance Commission commissioner Eduardo Malinis said actual property claims already total more than P14 billion with the figure expected to still rise as the assessment period lengthens.

Another P1 billion worth of claims came from car owners from flood-damaged vehicles, Malinis said.

“The P12-billion estimated insured property claims could top P14 billion as the assessment figure gets updated,” he said.

Standard Insurance Co. president Ernesto Echauz, however, said the potential claim of P15 billion is smaller than what the industry paid in the aftermath of the eruption of Mount Pinatubo some 19 years earlier.

Malinis also gave the assurance that the industry has more than enough resources at hand to service all damage claims.

“I gave the assurance personally to President Arroyo at the Cabinet meeting soon after Ondoy,” he said.

Malinis said only a small fraction of the estimated P1 billion damage claims of vehicle owners paid additional premium for so-called “Acts of God” (AoG) and allied perils.

“Only around 30 percent of the P1 billion damage claims have acts of god and allied perils cover,” Malinis said.

Standard Insurance Co., meanwhile, indicated extending AoG to all comprehensive motor car insurance policyholders effective Oct. 15.

The firm also assured car owners that their claims for mandatory coverage of damage to and loss caused by the AoG in the wake of Typhoons “Ondoy” and “Pepeng” will be immediately settled.

Echauz said about 50 percent of the total number of insured units with AoG coverage is concentrated in the Metro Manila.

He said Standard Insurance, with about 30,000 vehicles insured in the company, 300 of which were under AoG insurance clause were severely damaged by typhoon Ondoy’s flooding last month.

“Our company is supporting the proposal to automatically cover the comprehensive insurance policy the so-called AoG on motor vehicle damaged by floods and other calamities,” he explained.

However, he clarified that it will not be free since “we will be sending endorsements with the prescribed rate.”

The AoG coverage becomes an automatic coverage for Standard Insurance motorcar policyholders when they receive the policy endorsement with the terms and conditions including the prescribed rate.

To speed up processing of insurance claims, Echauz said they rented a big warehouse where the damaged vehicles can be cleaned and later assessed by their personnel to pave the way for their major repair in their respective dealership.

The country’s major insurance company also has its own technical group, composed of trained mechanics and engineers — who coordinated the towing and repairs of the vehicles with automotive dealers.

In turn, he said, as a major policy of Standard Insurance, these car dealers aside from supplying the parts, “we also grant and offer technical support by their respective car plants.

“Although we did not have a problem on the towing, considering that the towing services in the whole city became exclusive for us, we had to resort to “detailing,” a specialized car washing and preparation of the vehicles before they are brought to the dealers for the actual repairs.

Days after typhoon Ondoy, car repair shops and towing companies in view of complaints of double or triple charges for towing and repair of vehicles that have been submerged during the floods were experienced.

Because both the towing services and also due to our dealer tie-ups, Standard Insurance is servicing other insurance companies and other clients, on a first come first serve basis. “We had to resort to contracting tow trucks and leasing warehouses for detailing purposes exclusively for our clients.”

Coming from more than 200 dealer tie-ups, corporate fleet clients and branches in Metro Manila, toward the end of the first week, our count was at around 300 vehicles, still within 1 percent of our motorcar policies with AoG cover in Metro Manila.

“We have utilized our own in-house adjuster team, supported by our risk engineers, to immediately adjust and settle the residential claimants. They are the most in need and, in our experience, settling each in terms of amount is only equivalent to a motorcar flood claim,” he added.

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