Its been a long while since i last blogged about insurance. My company has been in the industry since 2006 and it means that’s how long ago i started to become an agent as well. i really like the idea of insurance because of its principles; Fair and without prejudice. There is no double meaning or interpretation, it is what it is. Firm and Just but with the help of many agents like me, we put compassion to it.
Last May, we visited the US and of course i have to rent a car and it has to have insurance with it. On some days, i rode my friends car also insured and my sister in laws car also insured. In short, all cars there has insurance and i asked the million dollar question: “Why don’t you claim this (a medium dent with scratches)? Is it expensive to claim and do you have participation fees?
The answer is that most Americans are aware that insurance are reserved for devastation and catastrophic damages. They knew that if they kept on claiming against their insurance, their premium rate will go higher. They know and they respect that. So i asked again, how can the insurance know that you claimed? you can always switch insurance companies and lie about your loss history. The answer is US citizens have a tool to trace the loss history of a motor vehicle, their insurance companies there share informations about loss history which helps them minimize their loss potential. As to lying, most citizens believe in their justice and criminal system, so they don’t want to engage on any libellous act because they know they’ll get into trouble. That’s a first world mentality and that’s how it should be.
Here in Manila, Pinoys want to claim a scratch, wants to claim dent, wants to repaint the whole car and use insurance to cover it. Pinoys want to dictate their own car value and so on. All breaches of insurance, Pinoys does it. Since these are partial and minimal losses, Pinoys encounter participation fee issues, depreciation issues, consequential loss issues average clause issues for properties. They complain about these most of the time. A common computation would go like this:
Total Repair Cost 10,000
Participation Fee 3,000
Depreciation Fee 2,500
Total Insurance Liability: 4,500
Pinoy would react angrily: ” What? Mas malaki pa babayran ko kesa sa babayaran ng insurance? wala talagang kuwenta ang insurance!” (What? My insurance will shoulder less than i do? Insurance is really useless!)
The following year, he/ she will switch insurance thinking that previous insurance didn’t work for them. and the cycle goes on. If we have the same tracking system with the states, the story will change.
And because most Pinoys don’t believe in the insurance system, Don’t believe in the Government, Pinoys are not afraid of the crime and justice system, we know we can always get away with it. We always believe that there is always someone to corrupt with.
Even the insurance institution themselves are not unified, the Insurance Commission should be at the helm of this. if i’m not mistaken there are factions among insurance companies. There should only be one and they should all invest on that tool to trace loss history of all the cars, properties in the Philippines, not just Manila. The tool will surely help the industry grow stronger and more reliable.
I urge the government to include insurance as a subject or curriculum to our education system. Insurance is a multi-billion industry, every Pinoy should be aware of what insurance is and how insurance helped a lot those who invested in General Insurance from devastation. How insurance can provide savings. And to change the perspective of Pinoys towards General Insurance as expenses instead of an investment.
This is not an overnight problem solving, this can take several generations but we can shorten it by starting with ourselves, disciplining ourselves and respecting the local laws. The rest will follow. We should at least encourage our kids to have a first world mentality rather what we all have now.