VietNamNet Bridge – Insurance companies expect to suffer serious headaches when it comes time to distribute compensation to auto owners for vehicles damaged during the worst flooding in three decades.

A broken-down auto has to send for a tow truck after a flooding. The total compensation for auto damage repair in Ha Noi is estimated to be about US$1.8mil, equivalent to 10% of annual vehicle insurance revenue.

"Bao Viet Insurance Group received approximately 140 claims from auto-owners with total damages reaching at least VND3 billion (US$182,000)," says manager of the vehicle department Dinh Quang Tan.

Bao Viet has more than 3 million motorbike policy and 600,000 auto policy customers nationwide, making up over 30 per cent of the auto insurance market share.

"Petrolimex Joint Stock Insurance Co (PJICO) has received more than 150 flood damage claims from customers, with total losses coming to approximately VND5 billion ($303,000)," says deputy director Nguyen Tien Dong.

Dong adds that claims for luxury car damages account for more than 20 per cent of the total compensation requests.

PJICO now handles between 25 to 30 per cent of the domestic auto insurance market share and more than 40 per cent of the motorbike market share, Dong says.

Post and Telecoms Insurance Co (PTI) has announced it expects to provide compensation to auto-owners in excess of VND2 billion ($121,000) due to the floods, says deputy director Luu Quang Hieu.

According to some insurance company statistics, the total compensation for auto damage repair in Ha Noi is estimated to be about VND30 billion ($1.8 million), equivalent to 10 per cent of the yearly vehicle insurance revenue.

Under the law regulating auto insurance, most normal damage will be compensated based on the terms of the individual insurance polices purchased by owners.

In the case of damage to rods and pistons inside the engine combustion chamber, which is commonly caused when drivers attempt to start an already immersed engine, insurance companies will refuse to compensate the owner unless they purchased a special type of insurance specific to this phenomenon.

The flooding has forced many insurance companies to run full throttle, with customer assistance offered by telephone 24 hours per day.

(Source: Viet Nam News)