Fire insurance contract should be clear

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)