Insurers suffer from historic floods

Bridge – Bao Viet Insurance has had someone on duty until 1-2 am in the morning since the historic heavy rains began on October 31. Though having not calculated the damages, the group believes that it would suffer severe losses.

By the afternoon of November 3, or three days after Hanoi began sustaining the historic floods in the last three decades, over 50 car owners reported damages to Bao Viet.

The insurance group had estimated that the total number of sustained vehicles may reach 100, and that the group may have to spend several billions of VND to compensate the damages.
An official from Bao Viet said that the number of damaged cars may be bigger if counting the vehicles that were damaged in the expanded Hanoi. Bao Viet’s vehicle insurance has never before incurred such a heavy loss.

In the insurance policies with Bao Viet, there is a provision on compensation when cars are submerged under water. The clients, who accept the provision, have to pay additional premiums of 5%, but will be insured 100% for risks. If clients do not buy the insurance clause, they will not get the compensation if they try to kick start when the vehicles are flooded.

Among the 18 cars submerged on the underground floor at the C6 My Dinh residential quarter, some of them were Bao Viet’s clients. As this is a natural calamity, it is highly possible that the vehicles’ owners will be insured no matter what if they bought the insurance clause on compensation when cars are submerged under water.

The Head of the Vehicle Insurance Division, Dinh Quang Tan, said that since Hanoi became flooded because of the heavy rains, Bao Viet’s staff had to come to sites to assist clients to repair broken down vehicles. Tan said that the staff had to work overnight on October 31, when there were too many broken down vehicles. Only after assisting clients to rescue vehicles, the company will begin assessing the damage levels in order to define the compensation.

Bao Viet now has some 3 million clients who are the owners of motorbikes and 500,000 cars nationwide. In Hanoi, Bao Viet now holds 40% of the market share, followed by Bao Minh, PJICO, and PVI.

PJICO has also estimated that the number of damaged cars in the heavy floods may reach 100. Among the 18 vehicles submerged in the C6 My Dinh case, four were the clients of PJICO.
Insurers said that the number of broken down motorbikes in the floods was relatively large. However, as the motorbike owners only purchased the compulsory third-party insurance, and did not purchase insurance policies for body work, they will not receive compensation.

Source:http://english.vietnamnet.vn/biz/2008/11/811801/