No rise in claims for flood damage, say car insurers
Singapore
SINGAPORE motor insurance companies have not seen an uptick in flood-related claims in the past two months, but a major insurer advised motorists to understand the scope of their insurance cover as flood damage is not included in some policies.
Insurance companies told The Business Times that the number of claims they received for cars damaged by floods in December and January have been minimal.
AXA Insurance received fewer than five such claims in the two months, while NTUC Income recorded fewer than 10 flood-related motor insurance claims annually in the past five years.
Heavy rain in December and January caused flash floods in various areas such as Tampines, Boon Lay, Outram and Seletar.
Peh Chee Keong, NTUC Income vice-president and head, motor insurance, said: "From our observation, motorists here are generally careful when driving in areas affected by flash floods.
"Therefore, we do not expect flood incidents in Singapore to have a significant impact on our motor claim experience," he said. "We also do not foresee motor insurance premiums increasing due to flood-related reasons."
Ankush Bhardwaj, AXA Insurance property and casualty retail line director, however, believes the number of flood claims cases will climb if the frequency of flash floods increases.
Asked whether car insurance premiums will increase as a result, he replied that flood risk is one of many factors taken into account when AXA prices its motor insurance portfolio.
"If the overall occurrence of claims resulting from flash floods remains low, we do not believe that there will be an increase in premiums," he said.
Currently, the firm does not take into consideration the level that cars are parked at when working out its premiums.
But "depending on the future incident rates of cars being damaged by floods as a result of being parked in the basement, we may consider including parking location in our rating factors", he added.
Flood events in 2011 and 2014 reportedly damaged cars in underground carparks.
In 2010, when heavy rains caused flash floods on three days affecting even the central shopping district of Orchard Road, insurance companies paid out S$22.9 million, with S$11.6 million going towards motor vehicle claims and S$11.3 million for property damage and business interruption.
In all, there were 428 successful claims for damaged vehicles, and 440 for property and business losses then, according to the General Insurance Association of Singapore.
AIG Singapore advised customers to understand the scope of their car insurance policies as different policies provide varying levels of protection.
"For example, extreme weather, including flood damage, is often not included in some policies," said head of individual personal insurance Manik Bucha. "Car owners should therefore check their policy benefits and reach out to their insurers for clarification if anything is unclear."
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