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)