I’ve been telling this always that Insurance is very young in our country and Filipinos needs to know more about insurance. So as part of my advocacy, please read this first or watch the video presentation before buying your fire or car insurance. Th
is will help you in determining what you are trying to buy is the correct one. “Buying
correct insurance is an asset, buying wrong insurance is just an expense!”
What i’ll put here are in Lei mans terms and the one in Youtube are in legal terms.
1. Average Clause- the insurance company will assume that the insured is self insuring his or her property when during investigation of the loss, they found out that the loss is of greater value than the actual loss value. In this case, the insured shall be considered as being his own insurer for the difference and shall bear a ratable proportion of the loss accordingly. Example: Insured amount 5M, Actual investigated loss 10M, the insurance will pay the insured 2.5M which is 50% of the your sum insured. Remember that the insured is paying annual premiums and most of the time, the reason why they lower down the property’s value because they wanted to have a lower annual premium.
2. Principle of utmost good faith. The insurance requires full disclosure from the customer. Insurance will accept any value that you will declare with your property, they should not and would not debate on how much it should be because as the owner of the property, you know better. For your information, this can also be a ground for denial of claims.
3. Principle of Insurable Interest. A customer may only insure properties that is his or hers via legal documentation. There is no reason for someone to pay annual premium that is not his or hers unless they plan to do something fraudulent. For instances that you buy a second hand vehicle and prefers not to change ownership on your name, make sure to let your insurance agent know that so he can put a “paid by: your name” in the policy and give him or her copy of your deed of sale. This will save up lots of time in future claims processing.
4. Principle of Indemnity. The assured should always act and protect its property as if it is not insured. For example, you got hit by a bus and you had the chance to go after it, you should. Even just to get the plate number and bus company’s name so that your insurance company can go after them which is explained in number 5.
5. Principle of Subrogation. Insurance’s right to recover from the losses it paid to its assured from the liable third party.
6. Principle of contribution. Any individual has the right to assign multiple insurances to his single property but during a claim, insurances will share a rational proportion from the losses. Example: Your building is worth 10M and you purchased 4 insurances on different occasions at 10M each. At the time of loss, the 4 insurance will for sure talk to each other pay the ratable proportion. This prevents frauders to earn from insurances.
7. Principle of proximate cause. Insurers will only pay you for the perils you paid for. Even if you have a “comprehensive” insurance it doesn’t really mean that you are covered for everything. So you really have to be careful and detailed with your insurance agent to get the correct insurance for your property.
If you are interested to have your properties covered with the correct insurance, please feel free to give us a call. Contact us at 02-7245140. Well be glad to explain further.
Disclaimer: The clauses and principles are derived from the insurance code of the Philippines. The meaning and description provided in this blog is the personal explanation of the author. Insurance decision will still prevail and the author should not be liable for any decisions or outcome your current claim should arise from. This blog is purely for the purpose of expressing the authors passion with non-life insurance and its business.