Flood insurance, It's really Need to Lower Middle-Class Society?

Flooding is a risk that threatens the property such as homes, factories, offices and others. Including threatening vehicle as well as the heart and soul of man.

Community or company may choose insurance as a risk transfer mechanism. Risk of loss due to floods are not borne alone, but was transferred to the insurance company. There are several common reasons why people have not been or are not insured.

First, it was able to overcome the risk of flooding. Consideration, flood risk is considered small or already doing preventive measures. Insured considered throwing money because without insurance, flood can be solved.

Risk of flooding does not need to be insured when the results of the risk analysis states that the chances of a flood or a small impact. Also when preventive measures have been carried out so effectively lowers the risk of flooding.

Second, do not know the benefits of insurance. Do not even understand that the risk of flooding can be transferred to the insurance company. It occurs in people who are not familiar with insurance.

This issue is a challenge for the insurance industry. Socialization need to break through all layers of society to understand insurance and benefit the community.

Third, worry about paying expensive premiums. Community own perception about insurance and then take the distance. It also should not have happened.

There must be an explanation and illustrations to the public. Expansion of flood risk premium rates for property approximately 0.5 per mile. Guarantee flooding is still in the form of a guarantee extension of fire insurance.

For example, a house worth Rp100 million (buildings and contents, excluding the land). When the fire insurance tariff 0.56 per mile, then the premium Rp56 thousand a year. With additional assurance flood insurance risk, rate of 0.5 per mil, then an additional premium of 50 thousand a year.

There are also insurers who provide home insurance package with rates of 0.14 percent for a complete guarantee. Not only guarantee in Polis Standard Fire Insurance Indonesia / PSAKI (fire, lightning, explosion, aircraft downfall and smoke), also coupled with a guarantee of flooding, the family personal accident, theft, and other living expenses while. Enough with premium Rp140 thousand a year, has received assurances that a lot.

In the midst of intense competition insurance, the premium rate is negotiable or ask for a discount. Of course, there is a greater rate for areas prone to flooding.

Fourth, worry convoluted when filing a claim. These concerns are reasonable. Not infrequently in mass media published complaints insurance claim services. Neither claim is rejected, the process is not the appropriate time or payment demands.

This negative perception must be removed by the insurance industry to provide claims service is fast and accurate. Communities also need to be educated to choose a good insurance company in the service.

Fifth, people are not able to pay the premium. Illustrations premium above is 'only' USD. 50 thousand. But for low income people, it is quite significant value for other needs.

Overcome this problem, there needs to be support for another party that is the government. The form can be in the premium subsidy. The insurance industry needs to discuss with the government in carrying out flood insurance to the public.

Adequacy of collateral and hang insured

Claim due to flooding of most property insurance and vehicle insurance. Claims for other types of insurance, including life insurance, not great.

Not all insurance policies guaranteeing the risks of flooding. It should be explained to the insured (the policyholder). Property insurance does not guarantee flooding if the policy is only PSAKI.

Cars were submerged also not be replaced disadvantages if the policy without the risk of flooding expansion. Comprehensive vehicle insurance guarantees in the Standard Policy Motor Vehicle Insurance Indonesia (PSAKBI) is also no guarantee of a flood.

For those who do not understand the policy, when given information about the type of policy is a comprehensive, considered no guarantee flooding. Though not yet exist. Insured often do not understand the guarantee in the insurance policy. Although the policy is already in hand, not necessarily read. Though the policy is an agreement that contains the rights and obligations of each party.

Insured did not fully understand the risk of what is guaranteed and what is excluded. Post-flooding in Jakarta and surrounding areas in January, for example, circulating information via e-mail and blackberry messenger that the insurance company will not compensate the car from water hammer caused the car is turned on after the flood.

Of course, this information makes the fear of the insured. In actual policy clearly stated what is guaranteed and what is not guaranteed. Simply put, all the causes (proximate cause) is flooded and there are no exceptions water hammer, then the policy will guarantee it.

Efforts to hang insured about what is in the policy to reduce potential disputes in the future. Brokers, insurance agents and insurance companies have this responsibility. These preventive measures need to be carried out by an insurance company in order to continue to provide the best service and to maintain the image of the insurance industry in the community.

Concern for the insurance industry

For middle and lower public, need to be given a stimulus to their insured. The insurance industry does not need to do a cost-benefit calculation to guarantee flood them. Keep in micro insurance products with a premium mild. Other forms can be a significant premium discounts or free flood insurance coverage.
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