PERHAPS the biggest problem that has been confronting the car insurance industry, like the other sectors in society, is fraud.
Data from the Philippine Insurers and Reinsurers Association showed that the estimated amount of fraud associated with vehicle insurance reaches as much as P1 billion every year. This, according to the association, has been committed by individuals and organized groups alike. The group said this type of fraud includes false car crashes, repairs and car thefts.
PIRA chairman on technical committee on motor car insurance Arturo Reyes said during the first car insurance summit in Pasay City in July that fraud involves deception, betrayal and lies. He said these kinds of activities are done in secret, either by individuals or organized groups.
Reyes, however, sad that PIRA has yet to conduct a study on the actual state of fraud in the Philippines. Reyes said fraud accounted for more than 10 percent of the entire losses in motor car insurance.
“But this only accounts for those insurance companies paid for but did not know to be fraudulent. It still does not include those detected as fraudulent and were not paid. As you know, our laws do not recognize attempted fraud. Although we catch a lot, we could not do anything against these fraudsters,” Reyes said.
For her part, Insurance deputy commissioner Vida Chiong said insurance fraud was victimizing both claimants and insurance providers. She said the Insurance Commission was recognizing the growing problem of fraud and issued a circular ordering all companies to formulate anti-fraud plans.
The Highway Patrol Group of the Philippine National Police have covered 74 different instances of vehicle motor insurance fraud from 2014 and 2016.
Because of this alarming numbers, former chief of the Land Transportation Office Alberto Suansing earlier urged stakeholders of the insurance industry to police their own ranks. Suansing said the third-party liability insurance scheme for motor vehicles is a major source of corruption. He added that unscrupulous and dishonest insurance agents and companies as well have taken advantage of this scheme.
Like a two-way street, it takes at least two to commit fraud. Roger Opalla said that unscrupulous individuals from government agencies and even insurance companies and car buyers themselves could be “Conniving” to commit the crime.
Alliedbankers has been very careful when it comes to doing transactions with walk-in clients Opalla said. The company always sees to it that the needed documents are complete before dealing with potential clients.
The ascension into power by President Rodrigo Duterte middle of this year and his intense campaign against all forms of criminality also resulted in a decline of carnapping cases in the country. The Highway Patrol Group earlier reported a sharp decline in the number of cases of carnapping in the metropolis.
Opalla said car jackers are never choosy. They pick any model– be it Land Cruiser or Fortuner down to the locally-manufactured Toyota Vios.
“Probably, some taxi operators are involved here because Vios models are usually not expensive and could be chop-chopped and its parts could be fitted to other cars,” he said.
On the other hand, he said the carnapping of Land Cruisers and Fortuners is historically high during election campaign period.
He said more car insurance claims deplete the profitability of an insurance company. “Fortunately, Alliedbankers usually records a net income of around 20 to 30 percent growth annually,” he said.
Car insurance 101
In the Philippines, the law requires a vehicle owner to purchase a compulsory third-party liability insurance policy. PIRA said that this policy ensures that compensation is provided to the third party in the event of an accident.
The comprehensive coverage, on the other hand, is not required by law but advised by experts to be availed of by car buyers to cover all the damage to the car in different situations. For example, if somebody throws a stone to your car and it breaks your windshield, you need not worry if you have a comprehensive coverage. This also covers some other call “ acts of Nature” or “ acts of God,” or damages caused by calamities such as typhoons, floods, volcano eruption etc.
Collision coverage covers the damage that is most obviously expected of an auto insurance policy. The insurance company will pay for repair of a car if it is involved in an accident.
The Philippine Insurers and Reinsurers Association advises car owners to observe the proper procedure in case they figure in an accident and want to file claims with insurance companies.
First is to notify the loss or damage to company immediately by telephone, fax, e-mail or letter with full particular details such as nature of loss, date of loss, estimated loss, contact person and telephone number for ocular inspection. Also, every demand letter, claim, writ, summons and process shall be forwarded to company immediately on receipt.
Second, in case of theft or other criminal act which may give rise to the loss or damage, the insured shall give immediate notice to the police or any authorities and cooperate with company in securing the conviction of the offender.
Third, car owners must cooperate with company appointed adjusters or surveyors to conduct an investigations; and fourth, car owners must submit the duly accomplished claim form together with requested documents.
The documents needed to file a claim are: completed claim form; police report; affidavit; photographs of the damaged portion and full view of vehicle showing plate number; estimate of repair; photocopy of driver’s license identity card with O.R.; and photocopy of car registration.
In case of carnapped vehicles or total loss, car owners must also submit an original copy of complaint sheet from TMG (theft loss); original copy of alarm sheet from TMG (theft loss); original copy of Certificate of Non-Recovery from TMG (theft loss); full set of keys to vehicle; original copy of Insurance Policy; letter of release from financial institution (if applicable); original copy of cancellation of chattel mortgage (if applicable); and secretary certificate authorizing the person who will sign in Deed of Absolute Sale and Release of Claim (for corporation only).
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