AAUI to clarify 'all risks' clauses
AAUI to clarify 'all risks' clauses
Fitri Wulandari, The Jakarta Post, Jakarta
The Association of Indonesian General Insurance (AAUI) has
promised to hold talks with the Council of Indonesia Insurance
(DAI) to redefine the term 'all risks' as it relates to insurance
policies in a bid to clear up widespread public confusion.
"We think that the term (all risks) need to be clarified..so
we will try to discuss it with DAI's technical commission,"
Arizal E.R of the AAUI told The Jakarta Post on Wednesday.
He said that insurance companies might not have provided a
detailed explanation of the term to their customers.
"Insurance companies are not fully aware that the term might
cause confusion among their clients," he said.
Arizal said it was possible the association would establish a
standard definition to remove the current uncertainty.
DAI top officials, meanwhile, could not be reached for
comment.
In the aftermath of recent floods, many insurance policy
holders were disappointed to learn that their 'all risks'
policies did not cover flood damage.
Many consumers interpret 'all risks' literally and assume such
policies cover damage resulting from all types of natural
disaster, including floods.
At present, companies have different lists of risks covered by
their 'all risk' policies. Some companies include floods or
natural disasters in their standard all risk policies. Others
offer extension risk coverage which can be included in a policy
at the client's specific request.
According to DAI, however, the wording 'all risks' in an
insurance policy is a technical term relating to a list of risks
that are not covered in a policy.
An actual 'all risks' policy highlights risks that are not
covered by the policy, Arizal explained.
"Insurance companies don't use the term correctly when selling
their product to their consumers," he said, adding that AAUI
would ask its 106 members to clarify the term.
Meanwhile, PT Asuransi Bintang has begun making downpayments
to clients whose houses were inundated by the recent flooding.
"It is our commitment to make sure that our clients can get
their rights," Ariyanti Suliyanto, the company's president
director said.
As of Feb. 13, the company had received 122 flood-related
claim notifications, covering 34 factories/businesses, 44 houses
and 44 vehicles.
"In two days, we will have settled all 44 claims for houses
with total downpayments of Rp 1 billion (about US$96,618),"
Ariyanti added.
"The remaining payments will be calculated once we get the
final settlement," she said.
Ariyanti added that the firm's reinsurance companies had
provided funds to cover flood-related claims.
"We won't have any difficulties with our cash flows," she
said.