THE AMATEUR video taken at the UERM parking lot during the height of typhoon Ondoy showed what happens to cars when flood gets to them: they float and bump into each other, and become heavily damaged.
The flood was considered by insurance companies as an act of God, and those without coverage for it sadly could not claim for damages.
We asked Arthur L. Panganiban, EVP/COO of Gotuaco,Del Rosario Insurance Brokers, Inc., an all-Filipino professional insurance broking and consulting firm in the Philippines, what this is all about and here is what he said.
Q What are considered acts of God? A An act of God is an act occasioned exclusively by forces of nature, uncontrolled and uninfluenced by human intervention and which is of such character that it could not have been prevented or escaped from by any amount of foresight or prudence. This is due to natural causes such as earthquake, typhoon, floods, volcanic eruptions and the like. If it might have been avoided by human prudence and foresight, it cannot be considered an act of God.
Q Why is this not automatically covered in a standard comprehensive motorcar insurance policy? A A standard comprehensive motorcar insurance policy covers the following risks: 1. Physical damage due to normal vehicular accidents (collision of the unit with another vehicle or with property or to some extent, with a person); 2. Theft; and 3. Excess Third Party Liability Insurance for Bodily Injury and Property Damage (covers liability of the insured against third party claim for bodily injury and/or death and property damage)
A review of "General Exceptions" under Section IV: Excess Liability Insurance will even indicate that Acts of God is a standard exclusion under the motor car policy but has through the years evolved into an extension of cover (a buyback, if you may) that can be purchased for an additional premium.
Insurance has a statistical base and is dependent on the law of large numbers. Insurers will insure a large group of homogenous risks in order to predict losses with a reasonable degree of accuracy and to spread the loss evenly over the group. This likewise affects the pricing of insurance products.
Unfortunately in the Philippines, nobody buys flood cover unless they are in a flood prone area therefore resulting in a narrower pool for insurers. Acts of God cover therefore have not been made a standard cover under a motor car policy for this reason. However, it may be offered as an extension /rider to the motor policy for an additional premium.
Q Is this also part of non-life insurance for property/houses? A The main risks covered are fire and fire caused by lightning. Natural perils such as earthquake, typhoon and flood are available to clients as an extension to the fire insurance policy for an additional premium (under the term Allied Perils). The term "Acts of God" is not used under the fire insurance policy and is not treated as a group of coverages. Generally speaking, the specific natural perils such as those mentioned above that are covered, excluded from coverage, are listed, clearly stated and defined in the policy. Q Is it wise to get coverage for Acts of God? A Ultimately, you'll need to decide how much of a risk Acts of God are to you and your property, whether it be a house or a car. An additional P2,000 may suddenly make your car insurance seem expensive. However, having peace of mind that your insurer will take care of your problems, no matter what the cause of damage, can be very reassuring. It is prudent to consider the effects of global warming in the changing weather conditions in the Philippines now that it has become a reality.
Q Please comment on the increase in premium for Acts of God insurance coverage after Typhoon Ondoy. Is this justified? Why or why not? A Although reinsurers would disagree, Acts of God was not really considered by most Filipinos as a peril that we were exposed to until the likes of Typhoon Frank in 2008 which severely affected Iloilo and neighboring areas and now Ondoy directly affecting Metro Manila (understand that up to now, provinces directly affected by this typhoon have yet to make a complete recovery).
AOG cover was previously even extended for free by most insurers to unit owners. However, in the light of global warming and the possible future effects it will have on the Philippine weather conditions insurers have now agreed that it is a real peril which we are exposed to as a nation and should therefore be covered and priced appropriately.
At present there is a market consensus that AOG cover for motor shall be priced within the range of from 0.5% to 0.7% of the vehicle sum insured. If your vehicle was involved in the current Ondoy claim you will note that detailing alone for the car would cost somewhere from P5,000 to P10,000. There will be an additional expense to the insurer if they have to replace electrical wiring and the like damaged in the flood. With all these the cost to clients for an AOG cover will actually not be as expensive and will be justified. Total expenses for a unit completely submerged in typhoon floodwaters are estimated to amount to around P150,000. Often, it is a prudent decision to pay an additional premium than shoulder all the expense to restore a unit affected by a natural peril listed under Acts of God cover.
Taking insurance from the insurer is just like taking headache pain reliever. the purpose of insurance is to give you peace of mind that if something happens the insurer will shoulder the cost of damages incured. these will defend on the scope of protection you buy from the insurer. day in day out you have that peace of mind that you have the protection of someone who will shoulder the cost of damages incured. now you can sleep soundly every night.
i think its time to change this term. it is not politically correct to say that it was God who has done all of this.
But I would also like to remind the readers that the insured would also pay for their 'participation' to tune of 3,000 to 5,000 pesos depending on the car make. This is exclusive of the total premium you initially paid to the insurance company.
Off-topic: I think the phrase "act of God" is a terrible choice of words for the insurance companies. A more appropriate phrase would be "act of Nature."
You might not really like the term 'Act of God'. But surprise - it's a perfectly valid, legal term understood by lawyers and court alike! You need not take it literally that God did it. The term just has had centuries of usage in Western legal circles.
An alternative legal term is 'force majeure', but then how many Pinoys know French? :D
More here:
http://en.wikipedia.org/wiki/Act_of_God
http://en.wikipedia.org/wiki/Force_majeure
"act of GOd"... i love it!!!! pero sa iba.... nakakalungkot poh kc di nila pinahalagahan ang paggamit ng word na e2...
sana lang malaman nila kung panu nararapat gmitin ang mga salitang ito.
minsan na poh nating naitanung sa ating mga saliri kung nagamit natin e2ng mga salitang ito kung tayo'y sobrang napapasaya at nabibiyayaan ng ating Amang nsa LAngit.... so sadyang nagbubulagbulagan lng tayong aminin na ito ay resulta ng ating mga ginawa o ginagawa.... hmmmmm
let's be fair and thankful dhil C GOd sobrang mahal ang PILIPINAS... pansinin lng natin kung gaano nia tayo na spare sa lahat ng posibleng calamity pa na dadating.... hmmmm
God bless!!!!
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Act of GOD, para namang ang Diyos ay puno ng poot para gamitin natin ang words na ito para sa mga walang katarungang pangyayari, so para sa akin maling mali na gamitin natin ang ganitong salita. kung susuriin natin ang banal na kasulatan sa Job 34:10 say "Therefore, YOU men of heart, listen to me.Far be it from the [true] God to act wickedly,And the Almighty to act unjustly" at isa pa 1 John 5:19 say's " We know we originate with God, but the whole world is lying in the [power of the] wicked one" in this 2 verses of scriptures na mali talaga na gamitin natin o isisi natin ang mga nagnyayari para mag bunga ng pag durusa ang tao. masasabi nga na napakasimple na dapat nating malaman ito. sapagkat sabi nga sa Revelation 12:9 " So down the great dragon was hurled, the original serpent, the one called Devil and Satan, who is misleading the entire inhabited earth; he was hurled down to the earth, and his angels were hurled down with him" so malunaw na marami sa atin ang naililigaw ng pasimuno ng mga kabalkyutan na nangyayari dito sa mundo sa ngayon...
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This is a really funny concept, of "acts of god", as I've never seen it mentioned in any insurance literature, even in Cobra insurance plans. (well, that may show the inner workings of the separation of church and state, ha)
I think insurance is important and as long as you aren't really low low on money it will not hurt to take some precautions. In the end the home is really important - not really an asset but a very big investment nevertheless.
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We all believe in God's wrath and we can well please him by trying to bring ecological security and sustainable development because nature is God's masterpiece. Natural disasters can occur anytime if we do not take climate change seriously and it is a fact but taking precautions and planning wisely shoves away most of our burdens. Choose an insurance which pays for natural disasters and try not to create a relapse in the payments after all its for our safety.
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I hate insurance companies. They are such suckers for money.
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In the US homeowners and renters insurance can be sometimes tricky depending on the area of the country. It pays to know it covers and doesn't cover. In Venice Florida homeowners insurance is necessary but not uncomplicated because of the recent hurricanes.
Insurance is must ! We must get it.
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It really depends. Where I live I don't know if I have auto insurance coverage for floods or trees falling on my car (for example) because for instance there are no trees, no rivers nearby so in the end it's not really worth paying for these kind of calamities.
Situations like these can be tricky. It's best to go to a consumer credit counseling service to find out what you can afford and what is best for you and your family.
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This was one of the most well documented blog entries I have read in a long time. It was a pleasure to fill all the gaps I had about this topic. Well written an concise.
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i have gotten much information about insurance companies tricks how they misuse the words and get earn money from people . i am really thankful to you.
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Yes you should get insurance coverage for acts of God, speaking as someone who had extensive damage to his house after very strong winds. It cost me a lot of money.
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A standard comprehensive motorcar insurance policy covers the following risks: 1. Physical damage due to normal vehicular accidents (collision of the unit with another vehicle or with property or to some extent, with a person); 2. Theft; and 3. Excess Third Party Liability Insurance for Bodily Injury and Property Damage (covers liability of the insured against third party claim for bodily injury and/or death and property damage)
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So let me understand: if my home gets damaged by the flood... this insurance company makes a fool out of me and says that God wanted to destroy my home... funny... but I'm not laughing...
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A An act of God is an act occasioned exclusively by forces of nature, uncontrolled and uninfluenced by human intervention and which is of such character that it could not have been prevented or escaped from by any amount of foresight or prudence.royalty free music, iscsi initiator
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you should get individual health insurance for anything you think may happen at anytime. its just being safe
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Your story here seems indeed very sad and it's amazing to see how some companies take advantage of people... but that means the law needs to be improved so such things never happen again... Global Visas Complaints
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This is very sad and those insurance companies are not fair.I don't uderstand why they don't cover any accidents.An accident is an accident it doesn't matter if it caused by another human being or God Himself.3GPP Diameter
In case of acts of God would the landlords insurance cover any damage to my apartment? I don't have a renter's insurance and neither does my friend that's staying with me.
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Insurance is only worth it when you need to make a claim!
Accidents and acts of god are part of everyday life so I guess we all need insurance. Recently I needed to claim on my gap insurance after I had my car stolen.
Most homeowner’s insurance policies will cover damage from fire and so-called acts of God: wind, rain, hail, snow, ice and damage from falling trees or limbs, according to the National Association of Insurance Commissioners. One major exception is flood insurance, which must be purchased separately from your homeowner’s insurance. Depending on how close you are to a flood plain, your mortgage lender might even require you to purchase flood insurance. Most lenders require you to carry a certain level of homeowner’s insurance to protect their investment in the event of a catastrophe. Your insurance premiums can be included in your mortgage payments. Substantial equity in your home is required. Your home equity is calculated by taking the value of your home and subtracting all mortgage liens.The amount of equity required varies based on your age and the interest rate of your reverse mortgage loan. The older that you are the less home equity that is required to qualify.When you have determined that you meet the basic requirements and have enough equity in your home, you can use the reverse mortgage calculator to approximate how much cash you can receive.
Its a tough one because if insurers did cover acts of God everyone's insurance would rise to cover the cost. As it stands you can still get cover for your car, van or other motor vehicle you just need to pay extra to have it included on your policy. I think this is fair and should be something that's offered to a new customer upon taking out a new insurance policy.
Thanks for your patience and sorry for the inconvenience!
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this seriously blew my mind a little bit. I never knew the word "God" could be mentioned in this insurance stuff. But all in all, I think it's fair.
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this is an old issue, acts of god are typically excluded by most insurers but what is defined as an act of god is often unclear. In essence it usually refers to catastrophic events like earth quoates and volcanoes though it can also have other applications. To cover your self look for some affordable insurance quotes that cover natural disasters, this is probably your best way to ensure you have cover.
Insurance is very important in todays life. So the one who doesnt take benefits of insurance always has to pay from his pocket for his health in times he needs.
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But the point being made here is that, in those days, the Pasig was clean enough to attract people to jump in for a relaxing swim.
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I live in a country where the insurance covers what you call acts of God and the person that has that insurance does not pay more for it , and we have also a lot of Ezsaver programs because any help that the population can get from the authorities is more than welcomed .
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Nice article, I hope that they make the right decision and get it right.. get a cash out refinance