2024-08-08 02:45:46
While the total cost of damage from last week’s storm is still being calculated, the natural disaster has sharply highlighted critical flaws in the insurance process, particularly starkly illustrated by the definition of a flood. Section 1 of the Water Management Act defines the term “flood”, which the government drew attention to in an effort to put pressure on the insurance industry and retouch the lack of oversight in this area. Such communication can also create vain hopes for those in distress, because the definition of the law does not prevent insurers from defining flood as an insured risk in their own terms in their own way. This is also done in practice.
Insurance products are complex, they include mathematical models, legal nuances, social issues, geographical conditions, etc. Understanding insurance regulations is not easy, rather it is a complex task and requires specific experience and knowledge. Latvian Insurance Brokers Association (LABA) For days points out that the Insurance Contract Law provides that the terms of the insurance contract must be clear and understandable, and also provides for the obligation for insurers to prepare and issue an APID (insurance product information document; a document with a short, concentrated presentation of the most important insurance terms) to their clients. Unfortunately, it cannot be said that the insurance regulations developed by insurers always meet these requirements, which leads to the treatment of unclear or ambiguously understood insurance regulations in a way that is advantageous to them. As a result, the insured suffer, who cannot be sure which risks are insured and which are not until the time of occurrence of the insured event, as well as public trust in insurance as a whole suffers. A situation in which the insurance terms are not clear and understandable and allows for different, sometimes contradictory understandings of them, and especially when they are used by insurers for their own benefit to the detriment of their clients, is not normal, and it cannot be considered as complying with the law’s requirement.
Lack of supervision
Read the whole article in newspapers Day in the issue of Tuesday, August 6! If you want to continue reading the newspaper in printed form, you can subscribe to it+
2024-08-08 02:45:46