Archive for the ‘Insurance 101’ Category

This is another wake up call from the “ABOVE” that you really can’t take insurance for granted. Here are some quick facts about your insurance rider that will be famous again this year.

1. AOG- Acts of God (some use this term)

2. AON- Acts of Nature (some use this, but its the same)

3. It basically covers Typhoon, Flood, Earthquake,

4. It has a separate participation fee or deductible. For some they follow the .5% of the sum insured for Private Cars and 1% of the sum insured for Commercial Vehicles. To see what category are you in, click here. Others, they stick to 1% whatever category are you in.

5. Indemnity. Even if your car is insured with AOG/AON, your insurance company is still expecting you to save your vehicles from further damages because;

6. The insurance company will first inspect the car and declare if it is repairable or not. They will not instantly offer total loss. In the current situation we are in to  right now with Typhoon Pedring, if the Insurance offered for a Total Loss, negotiate a little and take it. Please be wary that we are in a state of calamity so insurance has to deal and negotiate with lots of Typhoon Victims. So when its your turn, grab it!

Well, I hope there will be a few claims this time around. And I also hope, insurance companies will diligently pay their assured! Have a great and positive day everyone!

Share

Here are the documents need to file for a fire insurance claim:

I. GENERAL PROCEDURES

1. Immediately send notice of loss to us or to the broker/agent from whom you purchased the fire insurance policy.

2. Protect the properties affected or not affected from further loss or damage and/or deterioration, as if the property has no insurance coverage.

3. Submit a proof of loss duly signed and sworn by you within sixty (60) days from the date of loss. It should include:

1. The knowledge and belief of the time/origin of the loss

2. Actual cash value
3. Amount of loss

4. Encumbrances

5. Other contracts of insurance and information related to the insured properties

4. If the claim is substantial and/or complex, we will appoint an independent adjuster/surveyor to handle the investigation of the claim. The adjuster/surveyor will shortly get in touch with you for inspection of the insured property and verification of the related incident.
5. Make yourself and/or your representatives available for the inspection of the damaged insured property.

6. To facilitate the processing and settlement of your claims, submit the required documents as listed below.

II. LIST OF DOCUMENTS

To be submitted either to the Insurance Commission or to the handling adjuster:

1. General Requirements

1. Sworn statement of fire claim

2. Non-waiver agreement

3. Affidavit of loss

4. Fire investigation report

5. Copy of the business permit

6. Copy of the articles of incorporation

7. Colored photographs of covered properties taken immediately after the incident

Share

When is the best time to let go? Many of us car enthusiast have emotional attachments to our car but sometimes being emotionally attached will lead us to losing more money. Others also find  it hard to let go of the car after fulfilling the 48months amortization of hard earned money and you feel that keeping it 4 to 5 more years will help you save money or make your money’s worth. It may and it may not.

Car Insurance is the answer to secure your investment from theft or own damage claims, however, some insurance companies nowadays insure only 8years old and younger, some extends up to 12 years old on case to case basis.

We should all take this seriously, for sure insurance companies have a study of its own why they pegged it at 8 years old or a max of 12 years old.

As an insurance expert, i believe that cars that is more than 8 years old will have problems finding automotive parts even if its Toyota or the best selling car brand in its era. Whether we want a “surplus” or a brand new part, finding a “not so common auto parts” will be your worst nightmare, it could take you months or sometimes years to look for a replacement. So you end  up at the losing end. Insurance company can’t help you either if the auto parts is not available in the country, you have to make an extra effort finding it abroad just to complete the very last part that your car needs to run normally. Plus the fact that there is a depreciation cost of 40% from the brand new price and the participation fee.

So when is the best time to sell your car? not more than 8 years old. You get outright cash at a decent fair market value and no risk of future hassles.

Share

These are steps and requirements in claiming for a marine insurance loss. It is said that Marine Insurance claim is one of the hardest and needs fine details of the incident.

Step 1. Notify all parties concerned after the discovery. These includes the supplier and/or shipper, the local trucking service provider and the insurance.

Step 1 is to make sure that your loss will be paid by the guilty party after the investigation. There is a lot of probability to whom the damage may arise.

Step 2. Gather pertinent documents like:

• Arrasstre Operator/Contractor
• Vessel’s owner/Agent
• Other bailees like customs Broker, etc.
• and their respective replies.

• Bad Order Certificate issued by the Arrastre Contractor
• Copy of turn-over Survey of Bad Order on Board cargoes issued by the Arrastre Contractor as attested by the vessel’s representative
• Original laboratory or Quality Control Analysis
• Original Invoice for repair/reconditioning of bad order or damaged items

• Bad Order Certificate
• Turn-over Survey on Bad Order Cargoes

• Short delivery or short landing Certificate issued by the Arrastre Contractor certifying the non discharge of package/s or Tally sheet of Discharge
• Notice of unlocated Cargo files by the Insured’s custom’s Broker against the ship owner or Arrastre Contractor
• Permit to Deliver imported goods

• Turn-over Survey
• Bad order certificate

Step 3 After notifying your agent on Step 1, a marine insurance representative from your insurance company will call you and ask you initial questions and might probably set an appointment with you and to see the damaged items.

As i mentioned in Step 1, the insurance will conduct a thorough investigation of the claim; the insurance may deny their obligation if they found out that the damages came from another guilty party which they will provide you with a comprehensive report that you can use to prove the guilty parties negligence.

Nevertheless, don’t feel bad that the insurance denied your claim, they just gave you a comprehensive report who should be liable, they are not evading the claim but they are just giving you the right to claim from the guilty party. If the insurance report said that the damage is due to an accident or force majeur then insurance will pay for the damages.

Remember, insurance is not a tool or last resort to get your money’s worth. The insurance will always respond to the accident. Guaranteed.

Share

Its been our 3rd time to hold an Insurance 101 seminar for the Accenture Philippines autoclub. We hope to do more soon. We get to see new faces and new questions every time we have this event. Its fun and at the same time informative for both parties. The first time we did this seminar, the insurance experts agency invited Prudential Guarantee to be the guest speaker then we invited MAA General on the second visit. Now, we have Standard Insurance as the guest speaker.  Thanks to Gerald Galang the trainer/comedienne of SICI who made the room lively with his corny antics! Since time is limited, we were not able to answer all of the participant’s questions and we are opening the comment section below for your questions and we will gladly answer all of them here!

We are open for these kinds of seminars for free. Please email me richard@insuranceexperts.ph.

Share

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. This 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.

Share

Yesterday, we got a phone call from a stranger. He wanted to ask if the decision given to him by Fortune Insurance after a Total loss was fair or not. Here is the case:

Mr. Insurance customer insured his 2004 Volvo S60 for P1,500,000. He got into a major accident and Fortune Insurance declared it a Total Loss. He also asked if he can get his Mags back worth 100K.

Reasons for declaring a Total Loss: 1. The car is no longer usable and repairable. 2. The total damage reaches 50% of the sum insured.

Mr. Insurance customer said that Fortune Insurance offered to pay him P800,000.

The question is why did Fortune Insurance offered him 800,000 and not the sum insured of 1,500,000?

IE: We saw a lot of loop holes in this transaction. 1. The Fair Market Value of 1,500,000. Yes, the value is correct. Because coming from its brand new price, insurance practice is to just depreciate 10-15% from its original price, thus arriving at that amount approximately from the 6years old Volvo S60. Mostly,if the car is mortgaged.

Unfortunately, the actual value of 2004 Volvo S60 in the metropolis is just around 800,000, meaning Fortune Insurance can buy you  a same model, working properly at that price.

Argument: Why did FI accepted the premium payable at the coverage of 1.5M  and did not inform Mr. Customer that he can just insure it at 800K?

Again, the 1,5M coverage is correct mostly if the car is mortgaged. If the car is not mortgaged, you may opt to insure your VOLVO S60 at 800K but there is a dilemma, the price of repair and parts of a Volvo is expensive, so if ever you encountered an accident even just a minor one and your cost of repair reaches 400K (easily), the insurance will declare it a total loss.

We are also not informed if the car is mortgaged, we don’t know if 800k offer is after the insurance company paid the mortgaging bank.

2. The insurance customer changed his mags without telling his insurance company. The insurance company should know any alterations in your car because by default, they will just refer to its original accessories. Now, if you want to know if you can get your mags back? i think its possible, you just have to replace it with the original mags if you still have it.

3. The Fair Market Value and the actual value is somehow accurate for the common brands like Toyotas, Nissans, Hondas and so on and has a big discrepancy on big brands such as BMWs, Porsches, Volvos, Audis, Lexus’ and Mercedes Benzes.

Mr. Insurance customer should not be worried with the offer. I believe that the problem belies on the economic status of the Country, very deep. Because if we have a bigger buying market for the Volvos then the FMV and the actual value wont be that big.

Disclaimer: The story is based from an inquiry by a stranger who seeks a 2nd opinion. The results of the decision should not be based on our opinion. We are also not affiliated with Fortune Insurance. We are just giving thoughts and opinions based on our understanding, learnings and experiences.

Share

I have been to this business for the past 3- 4 years and i’ve met a lot of people with different views with insurance. Most of them thinks that insurance is just an expense. Maybe this is the reason why the Philippines’ insured ratio is just 14% compared to our asian neighbor Japan with 90%+ insured ratio.

Sadly amongst the 14% maybe 50% of them don’t know what is their insurance all about. Most of them got insurance because their friend is selling them (life insurance), financing requirement and the rest just to say that their property is insured. I can say this because every time i explain the coverages, they really dont care as long as the premium is cheap.
Cheap has a lot of meaning in insurance. Agents can give you your target premium but be wary of your coverage, you might not get what you really want! As an insurance buyer, you should first check the credibility of the insurance company then the credibility of your insurance agent then the price, not the price first and who cares about the insurance company because in that manner you are just fooling yourselves!

Correct Insurance is an asset; wrong insurance is an Expense!- Richard Ng

Share

Many of you might be asking how much should you insure your property. Some of you may want to increase the value of your property not minding the annual premium, thinking you might get more if the loss arises. Some of you may want to decrease the value of your property thinking of saving a few bucks for the annual premium and getting the whole insured amount because you know that it is under insured.

We will now answer the unanswered! We will now explain why most Pinoy hated their insurance companies and agents before!

After 3 full years in the non-life insurance business, i ve seen all sorts of personalities. Some are honest and prudent and most are not. This goes to both the insurance companies and the people. The correct answer to this question is… If your property including your furnitures is below 3M, you should declare a value that will suffice to replace your investments if you will build your property now. Remember, the inflation rate in RP is 10% every year. Meaning if that 3M pesos was your construction value 5 years ago,then you are under insuring it, you can’t build a new building with the same cost. It should be around 4M-5M now.
Under insurance means If an item is underinsured and the insured risk occurs then the insured will only get a proportion of the damage that occurs.
For example a house worth P400,000, is insured for P300,000 and a fire occurs in the kitchen causing P100,000 damage. As the house is only insured for ¾ of its value. The insured will only get ¾ of the damage. That is P75, 000.
The average clause applies, when a partial loss occurs and the risk is underinsured.-Annie Patton.

This is the principle of Average Clause. I believe this very important clause was ignored by many in the Philippines thus leaving all insured buried with regrets after the loss and of course the fastest way to relive pain is to blame it on the agent or insurance companies.

If your property is more than 5M, its best to have an independent appraiser to know the actual value and replacement value of your property today. This should prevent you from under insurance and over insurance. Thus, saving you money now with annual premium and in the future for possible losses.

If your property is used for business e.g. warehouse or factory, most of you will not mind the structure now, for reasons that its an old building its only a warehouse, etc. Your not a businessman in that case! For the inventories, you should declare the average daily stocks on hand to suffice the lost in case it happens now!

If you are renting, you can insure the furnitures and equipments even without insuring the house or condo but its always best to ask your landlord if he/she wants insurance as well.

If you notice, i never wrote examples of Overinsurance, i never encountered it yet. However, people who tries to over insure will surely commit either an arson or a suicide. This is purely logical answer. hehe! I haven’t met someone who wants to pay more and gets less!

In a nut shell, Insurance will only bring you back at your current state before the loss arises. No one should get rich or poor via insurance. Unless, other wise the average clause is ignored!

Share

There are 2 types of claims. Through a letter of authority from the insurance company or through cash claims. The simplest and hassle free is via LOA or letter of authority. You just need to submit the requirements to your Insurance Agent or the service center and the insurance will coordinate with them. The minimum processing time will be 1-3 days depending on the damage of your car.

The other type is via Cash Claim. Insurance companies least like this type of claim for one obvious reason. Fraud. The basic objective of insurance is to bring back the assured to its original state prior to the accident. No one should either get rich or get poor with it. With Cash Claim, there are a lot of chances that an assured can make the claim favorable to him/her. To minimize fraud from cash claims, insurance companies just set a minimum price per parts or per labor. You, the assured will not have the chance to negotiate for the cash price. So if you have a claim, its best to choose the LOA than the Cash Claim.

For more informations regarding claims, please comment on this article or call us.

Share