Insured victims of riots may not get their money: Brokers

Insured victims of riots may not get their money: Brokers

JAKARTA (JP): The Association of Indonesian Insurance Brokers
(ABAI) hailed the Insurance Council of Indonesia's decision to
approve payments to victims of the recent rioting, but warned
that a banking clause in some policies may prevent the claimants
from receiving their money.

"Some of the insurance claims are bound by a banking clause
which states that the claimant's creditors are entitled to any
insurance payments," the association said in a statement.

"ABAI is concerned about what might happen if the settlements
take place according to the banking clause and claimants'
creditor banks offset the claims against outstanding loans," the
association added.

The association called on the country's banking sector to give
special treatment to riot victims whose premises were damaged
during last months rioting so that they could quickly begin to
rebuild their shattered businesses.

Without such help many would simply not be able to reopen for
business because it was simply not possible to take out new loans
at the current high interest rates, the statement said.

The council announced Wednesday that owners of shopping
centers, shop-houses and shops damages during the riots could
submit claims to insurance companies if their policies included
cover for riots, strikes and malicious damage.

Three days of rioting which began in Jakarta on May 13 caused
at least Rp 2.5 trillion (US$227.27 billion) in damages,
according to the official government estimate released last
month.

The Indonesian Retail Merchants Association has also said that
33 of its members suffered losses worth Rp 661.52 billion when
their outlets were looted. The figure does not include damaged
caused by fire and vandalism. (das)