After Hanoi downpour, insurers brace for billions in claims

Many autos broke down while trying to navigate flooded Hanoi streets on July 13.

A torrential storm hit just as a million or more residents of the capital were leaving home for work, and lasted for several hours. Because the storm overwhelmed the drainage system, many intersections and streets were flooded. Auto insurers expect that claims totalling many billions of dong will be filed in the storm’s wake.

According to PJICO, at least 25 clients called in for assistance, including one client in a wrecked Mercedes S550 limosine. A source at the insurance company said the car is insured for 600 million dong.

600 million dong is about $33,000.

Dang Tien Dong, a senior executive of PJICO, says the toll from the downpour is still being updated.

After the historic rain and floods of October 2008, PJICO had to pay out 20 billion dong for repairs to 100 cars that broke down.

A smaller insurance firm, PTI, has reported three cases where cars broke down in the rain that it is considering compensating for the troubles. After the October 2008 storm, PTI had to pay three billion dong in compensation.

Dinh Quang Tan, Head of Bao Viet’s Vehicle Insurance Division has counted 25 cases of damages to cars so far. Six are serious. Two involve luxury cars.

“I still cannot yet guess the toll, but I think it may reach hundreds of millions of dong,” Tan said.

At PVI, Tran Anh Tuan said that by late yesterday afternoon, the insurer had received reports of 33 clients’ cars that broke down. Tuan called the situation “not too serious. Car drivers now know how to protect cars when the car break down. When trouble occurs, they call for support; they do not try to jump start the engine like they did in 2008.”

In 2008, insurance companies paid out 50 billion dong in total compensation for damages caused by the great October floods. According to the Vietnam Insurance Association, the number of insured cars that broke down in that downpour in 2008 was 1000, including 500 luxury vehicles.

These days there are many more automobiles on the road.

Tags: car insurance, Vietnam insurance, Vietnam insurance market