Press Release
January 21, 2010


Insurance companies should be compulsorily required to indemnify owners of motor vehicles that have been damaged or destroyed by floods, landslides, earthquake and other natural disasters.

This is the objective of Senate Bill 3966 filed by Minority Leader Aquilino Q. Pimentel, Jr. which will amend the Insurance Code to ensure that car owners who are holders of comprehensive motor vehicle insurance policy are automatically compensated if their vehicles are wrecked by natural disasters.

"This bill will do away with the malpractice of insurance firms of refusing to compensate holders of comprehensive motor vehicle insurance policy on the ground that the natural disasters are acts of God that are beyond the ambit of the policy," Pimentel said.

When typhoons Ondoy and Pepeng hit the country in September-October last year, thousands of motor vehicles were swept and inundated by floods and landslides, rendering them inoperable and in many cases, beyond repair.

Owners of the water-logged motor vehicles filed insurance claims amounting to billions of pesos.

"It is, however, unfortunate that insurance companies deliberately resort to 'acts of God' clause in insurance policy to avoid payment of claims, leaving the comprehensive insurance policy holders helpless in the midst of enormous losses," Pimentel said.

He said this deceptive policy of insurance firms of refusing to honor such insurance claims is unfair to car owners who religiously pay their insurance premiums only to find themselves empty-handed upon filing their claims.

The Pimentel bill provides that "in case of a comprehensive motor vehicle insurance, no policy shall be issued and delivered in the Philippines unless it contains in substance the provision that comprehensive motor vehicle insurance shall cover all fortuitous events, such as floods, landslides, typhoons, volcanic eruptions, earthquakes and other related natural calamities, or indirectly, proximately or remotely occasioned by, contributed to or traceable to, arising out of, or in connection with the aforementioned natural events."

Pimentel said such inclusion of fortuitous events in the comprehensive motor vehicle insurance shall be subject to additional fees, as may be prescribed by the Insurance Commission.

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