The insurance industry in Malta is expecting a significant number of claims for damages to be lodged by all those who suffered some kind of damage to their property, business, vehicles or boats during the storm last weekend, said Adrian Galea, Director General of the Malta Insurance Association.
“It is too early to say or predict what the value of the claims will be, however, the Association has already launched the process of gathering data from its member insurance companies for the various types of claims for damages that they may receive over the coming days or weeks,” Mr Galea told MaltaChamber.org.mt, adding that the Association expected to see claims for damages to homes, solar panels or heaters, broken glass, and water ingress.
“Claims for damage to business property as well as construction sites for damages to protective walls and fences, machinery, tools, and equipment under specific all risks policies and possibly on works-in-progress in such sites would also be expected.”
Mr Galea said that this was a ‘regrettably’ slow process expected to span several weeks, since not all clients would lodge a claim immediately, and so enough time is allowed for claims to be received.
“Insurance companies would initially set aside a reserve based on the gross estimates of claims received, and then assess each claim on its own merits. Depending on the individual cases, they may also undertake on-site surveys to ascertain the extent of the damage. Once the claim is assessed, the insurance company concludes the process either with partial/full settlement or repudiation.”
Mr Galea said that as a general rule, provided that a relevant insurance policy was in place to cover the risks associated with storm damage, then a customer is entitled to expect settlement for the claim submitted. He lamented the ‘unfair criticism’ of the insurance industry that claims are not met, saying that this did not take into account the risks covered.
“Not enough thought and time would have been given at the outset when customers approach insurance companies for the transfer of risk, only to realise – especially at claims stage – that a particular risk was not covered, possibly as a result of non-disclosure or inadequate insurance cover. For example, unless a vehicle is insured against all risks which are normally associated with a comprehensive cover, damage caused by trees, falling debris or stones, severe flooding, and so on would not be covered,” he said.
However, he noted that since no two claims were identical, each insurance claim would be assessed on its own merit. “While insurance companies will try their best to settle a claim and reinstate their client to a similar position before the event took place, this will depend on the policy cover itself. Insurance companies will do their best to ensure that all those legitimate claims are met, as much as it is an insurance company’s duty to filter out those claims which are unjust, inflated or else simply not due because the policy conditions excluded such risks.”
Mr Galea emphasised the importance of ensuring that the right type of insurance cover is available for the premium paid.
“An insurance policy is a contract entered into between two parties, where the policyholder transfers risk to the insurance company in consideration of the premium charged. Insurance companies are duty bound to ask for information about the risk to be transferred, so it is not unreasonable to expect insurance companies to refuse to settle claims if it is ascertained that policyholders were economical with the truth or the claims raised are not legitimate.”
But more often than not, Mr Galea concluded, situations where claim requests are not met are more likely to be acts of mankind rather than acts of God.