Fire insurance contract should be clear

JAKARTA (JP): A fire insurance contract should ideally stipulate clearly what causes of fire are considered force majeure and what causes are not, a consumer advocate said.

In response to fire stemming from the July 27 riot -- which razed about 20 buildings and caused Rp 100 billion (US$42 million) in material losses -- Zumrotin K. Soesilo told The Jakarta Post yesterday that the owners of those buildings could file insurance claims.

"However, the fact that the contract does not mention rioting as a force majeure does not mean that the insurance company is not obliged to cover the claim," Zumrotin, an executive of the Indonesian Consumers Organization said.

She said that even though the contracts signed by building owners may have no clear clauses on such incidents, "they still have an fifty-fifty chance to file a claim".

"Owners of the buildings razed in a fire caused by a riot could claim their insurance," she said.

Separately, PT Asuransi Central Asia's director, Muljadi Kusuma, told reporters during a break in a seminar on fire prevention yesterday that building owners would have to pay another 0.875 percent premium of the total fire insurance coverage.

"They would have to pay another 2 percent of the total if they want cars included," he said.

"However, the premiums paid could be lower if the fire safety system in the building is already adequate."

Ian W. Harland, the president director of New Zealand Insurance Indonesia, said in April that fire coverage in Indonesia was higher than any other country because of higher risks.

The high coverage was due to the inadequate fire safety systems in most buildings, he said, after paying an insurance claim filed by Hero Group for its Bogor Internusa outlet.(26)