Insurer not have to pay compensation for Bangkok mall burnt: 2010 political violence

[Ulic]

The article needs some of its facts clarified.

First off, AXA Thailand, while part of the AXA Group, the French multinational, operates as a distinct Thai entity because of laws that require Thai shareholders etc.

Which insurance unit is it? If it is really the life unit which I doubt, then complaints should be directed to KrungThai Bank, not AXA because Krungthai is the key stakeholder in AXA's Thai life operations. If it was AXA Insurance PCL. then AXA is only a major shareholder and the day to day operations including claims paying decisions are 100% Thai controlled. Key Thai shareholders are the Thai banking group UOB, and TISCO.

AXA is a brand in Thailand, and it's convenient to point a finger at the brand name rather than to acknowledge it was a Thai decision not to pay the claim for the specific reason that terrorism and insurrection is an exclusion. The bigger issue is that had the government not invoked the description,the policy holder could have been paid. In order for the policy exclusion to be used, there had to have been a legal declaration by the local authorities. As an aside, the business community did raise this possibility at the time, and its counsel was ignored. An insurrection is what we see in the south. What occurred in Bangkok, was illegal, it could be described as violent riots, vandalism, assault etc., but it was not an insurrection in the conventional legal sense. The declaration of insurrection was to allow the government to suspend civil liberties and to more easily deploy the army. The end result is that the policy holder suffered.

Do you mean it wasn't "political unrest"?

Let's put aside politics please. Terrorism and insurrection are standard exclusions under a commercial insurance policy. Some countries have special pools as was the case in the UK, or in the USA with its TRIA. Thailand has a fund to compensate victims of terrorism and has done so in the south.

The protests in Bangkok, were in a specific location. Insurrections are not confined to a small section of a city. I think we can all agree that some of the acts that occurred were illegal, even criminal and that the threshold for the perils of arson, malicious mischief, vandalism, riot and general fire were satisfied. These perils are insurable. Whether or not the events leading up to the fire can be called terrorism or likewise is questionable. I'm talking about the insurance policy definitions and parameters. When there were massive riots in London not too long ago protesting student fees, significant damage was caused. Some UK cities saw large parts of the city burnt to the ground. Far more people were running wild, and yet, it was not considered an "insurrection". When the G20/G8 meetings are held and protester go amuck, no one calls it insurrection. it is political unrest and it causes significant property damage.

Not labeling the events an insurrection or terrorism does not deny that there was wrongdoing, nor is it a whitewash. Thailand has political unrest every day. Whether it is farmers protesting prices, or tuk tuk drivers blocking roads on Phuket, or loggers fighting with the forest service in the north. These can often be violent events and are political unrest events.. They are not called terrorism or insurrection. The use of a broad brush label by the government for the Bangkok protests was inappropriate and was done for the benefit of the government of the day. Had the government not been so quick to label the event, the fire victims would have had an easier time collecting.

By the same token, the large protests in Bangkok are political unrest. They involve criminal acts when buildings are occupied or government officials work is interfered with. Suthep might be an insurrectionist, but the protests are neither an insurrection nor terrorism.

While I do see your point the examples you point to don't have the 90 dead protesters and military involvement.

I think the appeals court got is right from both technical and common sense point of view.

[Maha Sarakham Marty]

No one punished for the arson.

No insurance payout.

It's almost as if it never happened.

[cosmont]

The article needs some of its facts clarified.

First off, AXA Thailand, while part of the AXA Group, the French multinational, operates as a distinct Thai entity because of laws that require Thai shareholders etc.

Which insurance unit is it? If it is really the life unit which I doubt, then complaints should be directed to KrungThai Bank, not AXA because Krungthai is the key stakeholder in AXA's Thai life operations. If it was AXA Insurance PCL. then AXA is only a major shareholder and the day to day operations including claims paying decisions are 100% Thai controlled. Key Thai shareholders are the Thai banking group UOB, and TISCO.

AXA is a brand in Thailand, and it's convenient to point a finger at the brand name rather than to acknowledge it was a Thai decision not to pay the claim for the specific reason that terrorism and insurrection is an exclusion. The bigger issue is that had the government not invoked the description,the policy holder could have been paid. In order for the policy exclusion to be used, there had to have been a legal declaration by the local authorities. As an aside, the business community did raise this possibility at the time, and its counsel was ignored. An insurrection is what we see in the south. What occurred in Bangkok, was illegal, it could be described as violent riots, vandalism, assault etc., but it was not an insurrection in the conventional legal sense. The declaration of insurrection was to allow the government to suspend civil liberties and to more easily deploy the army. The end result is that the policy holder suffered.

The insurance contract should be with AXA Plc, the claim is not about life insurance.

AXA Insurance PCL is a member of the global AXA Group.

AXA Insurance PCL was established in Thailand in July 1998 and AXA Group is the major shareholder of the company.

Regarding the case, every standard insurance contract exclude rioting, civil war risks etc from the warranties.

It will gonna be hard to the plaintiff to prove that the situation was different.

Better then to send the Bill to prime minister who will transfer it to some relative who is hiding abroad...

[JRSoul]

If an a further appeal is lodged and the ruling upheld, the next logical step is to sue those charged with terrorism and/or (inciting?) arson. While the "red leaders" have made substantial gains over the last few years, they hardly have enough wealth to cover the damages, and I would expect their paymaster to be included as he does. Interesting times ahead.

While the Shin clan manage to dodge criminal charges by paying off those who make the decisions, civil charges will be harder to avoid, and with a lower proof requirement , likely to succeed. Ask OJ.

[paz]

I've never understood how insurers can be allowed to sell policies that exclude political unrest, riots, etc.

I can understand that war, nuclear events, or even acts of God that cause widespred distruction, are logically excluded as would be impossible for insurers to pay that many claims.

But in this case, just as if my car is destroyed during a protest, even if the only one, the insurer is largely able to pay, yet he won't - unjust, one is insured for what then.

[Mosha]

I think some people better seek protection. After this decision there will be some very angry people wanting their pound of flesh

[whybother]

I've never understood how insurers can be allowed to sell policies that exclude political unrest, riots, etc.

I can understand that war, nuclear events, or even acts of God that cause widespred distruction, are logically excluded as would be impossible for insurers to pay that many claims.

But in this case, just as if my car is destroyed during a protest, even if the only one, the insurer is largely able to pay, yet he won't - unjust, one is insured for what then.

Overall, they can sell what they want, and customers can choose to buy it or not. Insurers have exclusions in policies because doing so will reduce the cost of the policy. Customers can choose to get policies that include risks that are excluded in some policies, but it will cost more. The customer has to make that decision themselves.

[madmitch]

I've never understood how insurers can be allowed to sell policies that exclude political unrest, riots, etc.

I can understand that war, nuclear events, or even acts of God that cause widespred distruction, are logically excluded as would be impossible for insurers to pay that many claims.

But in this case, just as if my car is destroyed during a protest, even if the only one, the insurer is largely able to pay, yet he won't - unjust, one is insured for what then.

The so-called "Acts of God" exclusion is a myth. Most All Risks policies include losses from major natural disasters and it isn't impossible for insurers to pay out on many thousands of claims as they are all protected by catastrophe reinsurance, which limits the loss of the original insurance companies.

However you are correct regarding war and nuclear exclusions which exist on nearly all standard insurance policies.

Riots, strikes and civil commotion is a pretty standard exclusion as well. Why? Partly because their catastrophe reinsurance will also exclude riots, strikes and civil commotion (the reasoning behind this is complicated) so an insurer would be unable to risk such a potential exposure to a major loss.

[paz]

Thank you for your answer madmitch. Still curious about the complicated reasons that make re-insurers to exclude riots in coverage.

All what it takes is 20 angry people to randomly flip cars and torch shops, then you as owner are screwed with no remedy,

And there is really no alternative or choice as someone has said, beause in many cases insurance coverage is mandatory, while no alternative policy is available.

Edited December 26, 2013 by paz

[TallGuyJohninBKK]

Im trying to remember...wasnt there an almost exactly opposite decision re the insurance coverage for the burning of CentralWorld by the Red rioters???

For CW, my memory says the insurer either agreed to pay or was required to pay, and the insurance was thru Dewa, which is controlled by the Crown Property Bureau???

I thought the typical terrorism escape was going to be used in that case, but it wasnt. Do I recall a court ruling that no terrorism charges had been filed against the couple guys charged in the case??? Thus, no escape clause...

Sorry, Im on the road without access to all the past stuff...

[madmitch]

Thank you for your answer madmitch. Still curious about the complicated reasons that make re-insurers to exclude riots in coverage.

All what it takes is 20 angry people to randomly flip cars and torch shops, then you as owner are screwed with no remedy,

And there is really no alternative or choice as someone has said, beause in many cases insurance coverage is mandatory, while no alternative policy is available.

OK. One of the main reasons is the definition of one event. If, for example as happened in the 1980s, a riot started in Brixton, South London, word got around and people took to the streets in other parts of London and this spread to several other inner city areas in England, how many events is this? One event or several? Very difficult to ascertain.

Seconl\dly, a catastrophe is generally limited to a certain number of hours, often enough to include earthquake aftershocks, for example, but if a civil commotion extended over a long period then losses may occur over an extended period of time and many would fall outside of the time period, which can actually be designated by the original insurance company.

An exclusion is easier and cheaper than going through the legal process to ascertain whether or not there is coverage. However, coverage can generally be purchased by an insured or an insurer if so desired......at a cost.

[anotheruser]

This is pretty standard stuff. No insurance company pays out for acts of terrorism, war, acts of God etc.

[paz]

This is pretty standard stuff. No insurance company pays out for acts of terrorism, war, acts of God etc.

Standard stuff, that lets insurers get away with claims that are statistically rare, but will screw the insured completely when they happen, and without his fault. Like, "Oh sorry, everybody lost and so you too". But it is not everybody, because riots can only cause limited damage, well within realms of the insurere / re-insurer, whatever.

That is exactly against the broad definition of Insurance, and should not be allowed by regulators. My opinion only.

[whybother]

This is pretty standard stuff. No insurance company pays out for acts of terrorism, war, acts of God etc.

Standard stuff, that lets insurers get away with claims that are statistically rare, but will screw the insured completely when they happen, and without his fault. Like, "Oh sorry, everybody lost and so you too". But it is not everybody, because riots can only cause limited damage, well within realms of the insurere / re-insurer, whatever.

That is exactly against the broad definition of Insurance, and should not be allowed by regulators. My opinion only.

If everything was included in insurance policies, either no one could afford it or the insurance companies would go broke.

Everyone can get insurance that covers whatever they want it to cover. They choose not to and take the risk that it won't happen.

Sent from my phone ...

[whybother]

This is pretty standard stuff. No insurance company pays out for acts of terrorism, war, acts of God etc.

Standard stuff, that lets insurers get away with claims that are statistically rare, but will screw the insured completely when they happen, and without his fault. Like, "Oh sorry, everybody lost and so you too". But it is not everybody, because riots can only cause limited damage, well within realms of the insurere / re-insurer, whatever.

That is exactly against the broad definition of Insurance, and should not be allowed by regulators. My opinion only.

If everything was included in insurance policies, either no one could afford it or the insurance companies would go broke.

Everyone can get insurance that covers whatever they want it to cover. They choose not to and take the risk that it won't happen.

Sent from my phone ...

[paz]

If everything was included in insurance policies, either no one could afford it or the insurance companies would go broke.

Everyone can get insurance that covers whatever they want it to cover. They choose not to and take the risk that it won't happen.

You had said that already, and repeate twice more. And I doubt they would go broke. Thanks.

[Thai at Heart]

This is pretty standard stuff. No insurance company pays out for acts of terrorism, war, acts of God etc.

Standard stuff, that lets insurers get away with claims that are statistically rare, but will screw the insured completely when they happen, and without his fault. Like, "Oh sorry, everybody lost and so you too". But it is not everybody, because riots can only cause limited damage, well within realms of the insurere / re-insurer, whatever.

That is exactly against the broad definition of Insurance, and should not be allowed by regulators. My opinion only.

Sue the government authorities for not enforcing the law.

These exclusions assume that the authorities can maintain basic law and order.

Where were the security guards preventing these people from entering the building. They don't cover theft if you don't attempt to stop it.

Edited December 28, 2013 by Thai at Heart

[paz]

Sue the government authorities for not enforcing the law.

These exclusions assume that the authorities can maintain basic law and order.

Where were the security guards preventing these people from entering the building. They don't cover theft if you don't attempt to stop it.

Another laughable posting from TaH. See if you or any of your relatives wants to die to protect somebody's else property in a riot.

[Thai at Heart]

Sue the government authorities for not enforcing the law.

These exclusions assume that the authorities can maintain basic law and order.

Where were the security guards preventing these people from entering the building. They don't cover theft if you don't attempt to stop it.

Another laughable posting from TaH. See if you or any of your relatives wants to die to protect somebody's else property in a riot.

As an insurance company, they would want to know how anyone got in the building.

If everyone did a runner, hmmmmm..... Any reports of how they got in the building.

Any real proof that this wasn't Chinese lightening? And yes the central shopping centre up country where I was was saved by the employees and the security guards protecting it.

Not everyone is that cowardly unless of course the owners might tell everyone to leg it.

Edited December 29, 2013 by Thai at Heart

[whybother]

If everything was included in insurance policies, either no one could afford it or the insurance companies would go broke.

Everyone can get insurance that covers whatever they want it to cover. They choose not to and take the risk that it won't happen.

You had said that already, and repeate twice more. And I doubt they would go broke. Thanks.

Then you've got no idea how insurance works.

[paz]

If everything was included in insurance policies, either no one could afford it or the insurance companies would go broke.

Everyone can get insurance that covers whatever they want it to cover. They choose not to and take the risk that it won't happen.

You had said that already, and repeate twice more. And I doubt they would go broke. Thanks.

Then you've got no idea how insurance works.

Surely you do instead. Now tell me, a single car is damaged during a riot, would the insurer go broke ?

Will happily leave the last word to you as it seems it's so important. Will be probably be "you get what you pay for", Zzzzz.

[whybother]

Surely you do instead. Now tell me, a single car is damaged during a riot, would the insurer go broke ?

Will happily leave the last word to you as it seems it's so important. Will be probably be "you get what you pay for", Zzzzz.

If it was only a single car, it wouldn't be a riot.

[paz]

Surely you do instead. Now tell me, a single car is damaged during a riot, would the insurer go broke ?

Will happily leave the last word to you as it seems it's so important. Will be probably be "you get what you pay for", Zzzzz.

If it was only a single car, it wouldn't be a riot.

You gotta be thick to say that. Since when street protests adhere to a minimum damage standard? And the actual wording on policies is even broader than 'riots'. Anyway, don't bother spinning this hamster wheel further, we got your point already - screw the consuner while the regulator is enjoying his time.

Sent from my GT-I9070 using Tapatalk

[paz]

Surely you do instead. Now tell me, a single car is damaged during a riot, would the insurer go broke ?

Will happily leave the last word to you as it seems it's so important. Will be probably be "you get what you pay for", Zzzzz.

If it was only a single car, it wouldn't be a riot.

You gotta be thick to say that. Since when street protests adhere to a minimum damage standard? And the actual wording on policies is even broader than 'riots'. Anyway, don't bother spinning this hamster wheel further, we got your point already - screw the consumer while the regulator is enjoying his time in power allowing vexatious clauses.

Sent from my GT-I9070 using Tapatalk

[whybother]

You gotta be thick to say that. Since when street protests adhere to a minimum damage standard? And the actual wording on policies is even broader than 'riots'. Anyway, don't bother spinning this hamster wheel further, we got your point already - screw the consuner while the regulator is enjoying his time.

Sent from my GT-I9070 using Tapatalk

The point is, its not just about one policy. If there was civil unrest there would lots of cars and property damaged. In the end insurers as a whole need to pay, so they need to make sure there is enough money to pay. During serious events like cyclones/hurricanes, floods, fires, civil unrest, there is a hell of a lot of money paid out. It has to come from somewhere. It comes from customers premiums.

All insurance policies have exclusions. Examples: Health insurance - pre-existing conditions; life insurance - suicide; car insurance - driving unlicensed; house insurance - deliberate damage, flooding in flood zones, earthquake damage in earthquake zones.

Some other exclusions are in grey areas, but the reason the insurance companies have exclusions is to reduce costs - theirs if there is a claim and customers for premiums.

If you want the exclusions covered, then you need to pay a higher premium. You can't expect to have comprehensive car cover if you're only paying for third party insurance. You can't expect to get paid $200K for house contents if you're only paying for $100K cover.

From the insurer's POV it is all a risk management exercise. They look at the chance that they need to payout, and how much they would need to payout, and set their premiums accordingly.

Basically, they see that if there is civil unrest, then the likelyhood of them needing to pay out something on an insurance policy skyrockets, so the premium would also skyrocket. Customers have a choice as to whether they pay the higher premiums or not.

If the insurer doesn't charge high enough premiums, and then they need to pay out on a heap of policies, they will go broke.

Sent from my phone ...

[paz]

You can go on on this as much as you want, but is just an exercise in defending unfair practices. I want to think you do this because you're part of that industry, otherwise you're really wasting advocacy efforts for someone that will be happy to screw you too at the next possible occasion.

.

Just to try to open your mind one last time, In most countries there is near zero likelyhood of unrest, yet if one single car or property gets damaged by 10 guys under a political flag, insurer has a legal way to avoid payment. That happens because most people can't go reading past the first line of their contract, while regulators, as I said before, don't care.

Anything that could have been done to avoid that, for example a published cap on total compensation for widespread events and prorated payment if the cap is reached, has not ben done. Insurers have cartelized their policies and consumer can buy or be left unisured.

Now excuse me but if you want to stay on the hamster wheel, I'll leave the fun to you.

Edited December 30, 2013 by paz

[whybother]

You can go on on this as much as you want, but is just an exercise in defending unfair practices. I want to think you do this because you're part of that industry, otherwise you're really wasting advocacy efforts for someone that will be happy to screw you too at the next possible occasion.

.

Just to try to open you mind one last time, In most countries there is near zero likelyhood of unrest, yet if one single car or property gets damaged by 10 guys under a political flag, insurer has a legal way to avoid from payment. That happens because most people can't go reading past the first line of their contract, regulators, as II said before, don't care.

Now excuse me but if you want to stay on the hamster wheel, I'll leave the fun to you.

That would depend on:

- is 10 guys under a political flag considered civil unrest, and

- is it actually an exclusion if there is "near zero likelyhood" of it happening.

It's a bit hard to use a single hypothetical case to argue a point.

The fact is, insurance policies have exclusions. If you want to cover those exclusions you pay higher premiums.

It's all about risk and return, just like an investment. People invest in insurance so want returns on those investments. This isn't just the big insurance companies, but the little investors too.

If the premiums don't match the risks, investors lose money.

Sent from my phone ...

[Thai at Heart]

You can go on on this as much as you want, but is just an exercise in defending unfair practices. I want to think you do this because you're part of that industry, otherwise you're really wasting advocacy efforts for someone that will be happy to screw you too at the next possible occasion.

.

Just to try to open you mind one last time, In most countries there is near zero likelyhood of unrest, yet if one single car or property gets damaged by 10 guys under a political flag, insurer has a legal way to avoid from payment. That happens because most people can't go reading past the first line of their contract, regulators, as II said before, don't care.

Now excuse me but if you want to stay on the hamster wheel, I'll leave the fun to you.

That would depend on:

- is 10 guys under a political flag considered civil unrest, and

- is it actually an exclusion if there is "near zero likelyhood" of it happening.

It's a bit hard to use a single hypothetical case to argue a point.

The fact is, insurance policies have exclusions. If you want to cover those exclusions you pay higher premiums.

It's all about risk and return, just like an investment. People invest in insurance so want returns on those investments. This isn't just the big insurance companies, but the little investors too.

If the premiums don't match the risks, investors lose money.

Sent from my phone ...

And your case is hardly helped if the government goes off and declares this type of stuff as "terrorism".

They must be gutted but when the government declares it terrorism, what else cana court judge say?

[boomerangutang]

I'm sure those people who blocked the fire trucks (from getting to the scene) were arrested and prosecuted. OOps, sorry, of course not. This is Thailand.