30 July 2014
The General Insurance Association of Malaysia (PIAM), representing all general insurers and reinsurers in Malaysia, is deeply saddened by the loss of lives as a result of the MH17 tragedy which has left the nation in shock. We offer our heartfelt condolences to the families and friends of all those on board the aircraft.
Please note that investigations on the cause of the tragedy have just commenced, the Association will continue to closely monitor developments as they unfold.
It is to be noted that other than Fire and Motor Insurances, which are tariff and have standard policy coverages across the industry, other insurances such as those relating to personal injury, accident or medical are written by our members in accordance with their own individual terms and conditions and may differ from insurer to insurer.
However, as a guide to the public, PIAM wishes to provide the following FAQ in dealing with the commonly speculated causes of the incidents, namely: Terrorism and Acts of War (generally referring to war, invasion, act of foreign enemy, hostilities [whether war be declared or not], civil war, rebellion, revolution, etc.)
1.Does Travel Insurance cover an incident such as the MH17?
Firstly, we would advise you to check carefully the policy coverage and exclusions of your Travel Insurance policy. If you do not have a copy of the policy but you know the insurance company the Travel Insurance is purchased from, you can contact the insurance company concerned. Contact details of insurance companies are available on PIAM’s website at www.piam.org.my.
The cause of the incident has not been officially determined. Assuming that the plane was brought down by an act of terrorism, PIAM would state that based on underwriting practices of individual insurance companies and the area of travel, acts of terrorism would normally be covered under a travel insurance policy. But we know that some insurers do exclude this risk under their policies. As such, since the underwriting practices of each insurer differs, we would again advise you to check that your policy has not excluded acts of terrorism from the coverage.
On the other hand, acts of war are specifically excluded under Travel Insurance policies sold by all insurance companies.
2.What about Personal Accident Insurance? Does it cover incidents like MH17?
Any claims arising from acts of terrorism or war risks is an excluded cover under the standard Personal Accident Insurance policies sold by insurance companies.
3.What are the insurers’ procedure for processing death claims?
For these claims the common procedure, provided that the cause of death which occurs is not under the Policy Exclusion, insurance companies would normally require the following documents for processing of a claim:-
Claims Form Death Certificate Post Mortem Report Police Report
Further documents may be requested where necessary.
We wish to highlight that during the previous MH370 incident, insurers had taken a common stand to waive the death certificate for claims processing as the bodies of the victims were not recovered. In the case of MH17, the bodies have been recovered and death certificates will be available and should be a supporting document for the claim. However, in the event a victim’s body has not been recovered/identified due to the nature of the damage to MH17, insurers may consider to waive the death certificate on a case by case basis.
4.Are there any other forms of compensation available to the victims of MH17 apart from the above insurance policies?
We understand under a multilateral air travel treaty known as the Montreal Convention, it is stated that airlines are liable to pay damages of US$150,000-US$175,000 (RM477,000- RM557,000) for each passenger killed or injured in any airline accident, even if the cause of the accident is an act of war or terrorism. Also the airline is obligated to make these payments regardless of whether it is at fault.