When you live in the Philippines and own a car, it is natural to know how unpredictable the weather can be. Be it earthquakes, floods, volcanic eruptions, or typhoons, all are a part of our lives. Talking specifically from the point of view of a car owner and insurance (because that’s what we do at Zen Insure), all these natural calamities are a part and parcel of a driver's life, and it’s better to be prepared than sorry. Thus enters Acts of God coverage.
Undoubtedly, Acts of God insurance coverage is quite popular among policyholders. Despite its widespread reach, several misconceptions surround it that need clarification.
In this article, we’ll discuss five common myths surrounding Acts of God coverage and help you better understand this insurance plan. Thus, allowing you to unleash its maximum benefit.
So, let’s get started …
Acts of God coverage - Understanding the basics
What is Acts of God car insurance coverage? As the name suggests, Acts of God coverage is a car insurance plan that protects the car owner/policyholder against damages to the car/insured vehicle caused by natural disasters, such as floods, typhoons, earthquakes, landslides, volcanic eruptions, and other similar events beyond human control.
Why does Acts of God coverage matter? An insurance policy without this particular coverage leaves the car owner/policyholder vulnerable to financial loss. You see, when a calamity strikes, all the burden related to the vehicle repair cost will be on the owner's shoulders, which could easily run into thousands of pesos.
In short, getting Acts of God coverage isn’t a luxury, but a financial lifesaver.
Natural disasters & the Philippines
Photo from FreepikFor those who aren’t aware, the Philippines is one of the world’s most disaster-prone countries, with typhoons consistently causing billions of pesos in damage every year.
Now that you have a little understanding of Acts of God coverage, let us move on to discuss a few common misconceptions around this insurance plan.
Also Read: Is Acts of God coverage worth it for Filipino drivers?
Common myths around Acts of God coverage
Myth 1: The Acts of God coverage is part of a standard insurance policy
Reality: It is a highly recommended add-on
We have encountered several instances where the policyholder assumed that Acts of God coverage was a standard inclusion, without question. However, that is not the case unless the policyholder explicitly requests it from the provider.
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How much does Acts of God add-on coverage cost? The cost of this add-on depends on the value of your vehicle. Typically, it ranges between 0.5% and 0.7% of the insured vehicle's value. |
Myth 2: Acts of God coverage only applies to flood-related damages
Reality: It covers more than just water damage
Floods and water-related damage are common in the Philippines, especially during typhoon season. However, that doesn’t restrict Acts of God coverage to only offer coverage against other disasters.
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What are the common natural disasters that hit the Philippines? The list is long and includes typhoons, volcanic eruptions, earthquakes, and landslides. |
Also Read: What to do if your car gets flooded (and will insurance cover it?)
Myth 3: Acts of God claims are usually denied
Reality: Truthful information, duly accomplished with all the required documents, enhances the chances of approval
Policyholders often believe that insurance providers find ways to reject claims. Yes, claims are indeed denied, but that’s because of reasons such as providing false information, failing to follow the process, or submitting incomplete documentation.
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How can a policyholder file a successful claim? Here are some tips: Take clear photos of the damage & surroundings, obtain a police report, notify the insurer as soon as possible, submit all required documents at once, and schedule regular follow-ups with the agent. |
Myth 4: The insurer will pay for everything
Reality: Coverage depends on policy terms & conditions
Having Acts of God coverage doesn’t guarantee that you’ll be covered against natural disasters, regardless of the circumstances. Certain situations can result in a denial of the claim, either in whole or in part. For instance, if your car was parked in a known flood-prone area and you ignored warnings, the insurer has the right to deny the claim on the grounds of negligence.
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What are some of the standard car insurance exclusions? Wear & tear unrelated to natural disasters. |
Myth 5: Acts of God coverage is expensive
Reality: It is more affordable than you think
Compared to the potential repair cost after a flood or earthquake damage, the additional premium paid for Acts of God coverage is nothing. Let us understand this with an example: imagine spending PHP 6,000 annually on insurance versus paying PHP 200,000 to the mechanic for car repairs after a flood.
Also Read: Breaking down personal accident coverage in Philippine car insurance
Addition or removal of Acts of God (AOG) coverage
One question that policyholders often ask is, 'When should I add or remove AOG coverage?'
Starting with when to consider adding AOG - If you live or drive frequently in an area prone to flooding, typhoons, or landslides, it is a good idea to consider getting this coverage.
On the contrary, when not to consider removing AOG coverage - If your car is quite old, you might reconsider continuing with AOG coverage depending on the repair vs coverage cost.
Also Read: Common misconceptions about car insurance add-ons in the Philippines
Photo from ShutterstockActs of God coverage & insurance renewal/expiry
We’ll now clear up doubts regarding insurance expiry and renewal, specifically concerning Acts of God coverage.
What if a policyholder fails to renew the policy?
If you fail to renew your insurance policy, you are in trouble. Because if a disaster strikes, you won’t be able to file a claim, and all the repair costs will fall on your shoulders.
Is it possible to file a claim if the policy has expired?
No, you can not claim an insurance policy that has already expired. Such a situation will hurt you most at the time of a disaster, when you won’t be eligible to claim damages.
What are the risks of driving with an expired license?
The risks include paying out-of-pocket for repairs, being unable to file claims, and possibly incurring fines.
Bottom line
If you are a Filipino, then you must be aware of the unpredictable weather conditions and natural disasters the country faces. From typhoons to earthquakes to volcanic eruptions, anything can happen, anytime, without much warning. Thus, it leaves car owners in constant fear of losing or damaging their beloved ride. While they can take shelter in their home or at a safe sight, the car out in the open will face all nature’s fury, leaving it damaged and worn out.
Here, as a rescuer comes Acts of God coverage, a popular add-on among Filipino car owners, it is surrounded by several myths, which we have busted today.
Remember, Acts of God coverage isn’t just an add-on but a necessity for Filipinos' peace of mind. Therefore, whenever the renewal times come, don’t skip them and add AOG if it’s missing from your policy.
Also Read: Expired Insurance vs. Cancelled Policy: What’s the difference?
FAQs
Q1. Should I get Acts of God coverage for my 10-year-old car?
Ans. It all depends on the market value of your car and its repair cost. In case the car’s repair expense is more than its value, insurers often recommend skipping Acts of God coverage. However, if you live in a disaster-prone area, AOG is a worthwhile consideration.
Q2. What if my insurance policy expires before filing a claim?
Ans. If a car insurance policy expires before filing a claim, you won’t get any assistance from the insurer. Insurance only applies to active policies.
Q3. Is it possible to pay monthly instalments for Acts of God coverage?
Ans. Yes, some insurance providers allow monthly instalment payments for comprehensive insurance and add-on coverages, such as Acts of God.
Q4. Will adding Acts of God coverage affect my premium?
Ans. Yes, adding Acts of God coverage to your policy will increase your premium. However, the added cost is small compared to the financial assistance it offers.
Q5. I want to switch my insurance provider; is it possible to keep Acts of God coverage?
Ans. You can switch your insurance provider at any time; however, the Acts of God coverage car will not be transferred. You can request coverage for Acts of God from the new provider.
Q6. How long does it take to process an Acts of God claim?
Ans. Processing time for Acts of God coverage varies from insurer to insurer. The process typically takes 7 to 30 days, depending on the extent of the damage and the completeness of the documents.
Q7. What are the common reasons for the denial of a claim, even after having Acts of God coverage?
Ans. Your claim can be denied for several reasons, including late reporting, incomplete documents, false reporting, and failure to follow the claim process as instructed.
Q8. What documents are required to file Acts of God coverage?
Ans. Typically, the following documents are required: a copy of the policy, a police report, photos of the damage, the vehicle's OR/CR, and a duly accomplished claim form.
Q9. Does Acts of God car insurance cover damage due to volcanic eruptions and earthquakes?
Ans. Yes, the Acts of God coverage protects against nearly all types of natural disasters, including earthquakes and volcanic eruptions. However, there may be some exclusions, provided your policy explicitly mentions them.
Q10. Is Acts of God coverage mandatory in the Philippines?
Ans. No. Acts of God coverage is an optional add-on that is recommended for all Filipino car owners, particularly those residing in areas prone to disasters.
Q11. How much does Acts of God coverage cost?
Ans. Typically, Acts of God coverage costs range from 0.5% to 0.7% of the car's value.
Q12. Is it possible to add Acts of God coverage after buying a policy?
Ans. Yes, most insurance providers allow policyholders to add coverage later, when needed.
Also Read: 8 Dangerous car insurance scams to beware of in the Philippines
