ACTS OF GOD COVERAGE

Now more than ever, theres an ever growing concern about natural calamities destroying properties and lives. The recent events in Japan made it more pronounced that when nature strikes, we are at its mercy. Of course, the Philippines is no exception to that. In September of 2009, we had the Ondoy incident which caused considerable quantity of casualties and destruction. But while we cannot prevent these calamities from happening, there are ways to mitigate its effects. One of which is to insure our prope rties against loss or damage from some of these risks.

Lets concentrate on vehicles because car owners sometimes think that when they procure a comprehensive automobile insurance policy, it already includes all kinds of risks which could lead to damage o r loss of their car. However, you should know that only those 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. Many car owners do not get thi s insurance coverage because it would mean higher premiums. In most cases, people who availed of automobile insurance paid only for policies that covered normal vehicular accidents, e.g. own damage or theft. These are the popular ones. With Acts of God policies, a car owner will be protected against damage caused by typhoons (which includes flooding), earthquakes or an ything induced by nature like falling billboard or a falling coconut. But this insurance cover does not come cheap. It is averaging about 0.7 percent of the vehicles insured value per year. For your information though, under the Insurance Commission Circular 21 2010, the prescribe minimum rate is 0.10 percent of the total insured amount for

natural risks such as earthquakes, and another 0.05 percent for typhoon and flood. These rates are added to the basic prope rty insurance that usually covers only fire and lightning . For a Php1-Million car, this would translate to an additional of at least Php7,000 in insurance costs, on top of the P hp30,000 comprehensive annual premium for brand new units. However, policyholders who bought additional coverage for Acts of God can expect immediate action, but those without this may be in for more heart aches. Acts of God could include: Unusual weather factors - tropical storms, floods even droughts Unusual geological phenomenon - volcanoes, earthquakes, tidal waves etc. Unusual hazards - meteor damage, plagues of insects etc. Aside from calling them Acts of God, earthquakes, typhoon and flood are commonly referred to in the insurance industry as catastrophic perils. Usually, when you make a claim, your insurer will tell you that the calamity which caused damage to your property was an "Act of God", and then they do not have to pay, because you did not get this additional coverage . So, when taking out your insurance, you must try and make an assessment and reach an agreement with your insurer over what is reasonable to expect and what is unforeseen . And even those who had taken an insurance policy with Acts of God coverage, they will have to make do with a repaired vehicle instead of expecting insurers to replace their cars with new ones. Remember that the liability of the insurer is to restore unit to its condition prior to the damage. The insurance firm has the right to restore it.

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For example, a flood-damaged vehicles would normally get a replacement of its damaged interiors and restoring electrical systems -- repairs that could cost insurers about Php50,000 per vehicle. Please remember that an insured property, not only vehicles this time, should receive indemnification when it is damage due to natural catastrophes, when theres such a coverage mentioned in the policy. The insurance company should immediately indemnify the claimant. With whats happening in the world today, theres a necessity to re -consider getting additional coverage for your properties. Although it might cost you additional expenses to pay the premiums, it will nevertheless provide you with peace of mind. So, you might want to pay your insurance provider or insurance agent a visit to inquire about how to further protect your properties from these natural calamities. Be safe!