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Heavy rain strains insurers

By Wang Xinyuan (Global Times)

08:39, July 23, 2012

Property insurers and car distributors were busy Sunday handling claims from car owners after the heaviest rain in six decades swept Beijing Saturday, leaving hundreds of cars stranded in water.

Transport was cut off Saturday night, and cars under overpasses and in residential areas where drainage system is less efficient were trapped in water following the rains on Saturday, pictures posted on Weibo showed.

Property insurance companies had received 11,827 auto insurance claims by 9 am Sunday, Beijing Bureau of China Insurance Regulatory Commission announced Sunday.

Phone calls for auto insurance claims kept coming in Sunday, a customer service staff from Ping An Property & Casualty told the Global Times.

"We have sent majority of our technicians for onsite repair and rescue work," Xu Pei, a supervisor with Beijing Ruizheng Auto Trading Co, an auto dealer, told the Global Times Sunday, adding that many of their customers were still waiting for their cars to be towed as insurance companies' trailers were busy helping others.

The market predicts that companies offering auto insurance will suffer heavy losses while auto distributors with repair services will see a boom.

PICC Property and Casualty Co received 3,065 auto insurance claims by mid Sunday, the company announced Sunday.

Ping An Property and Casualty Co had initiated a contingency plan for auto insurance claims. Their Beijing office staff worked Sunday and received more than 2,600 claims, according to the insurer's announcement Sunday.

Despite the unexpected disaster, the rainfall in Beijing would not weigh heavily on the property insurer's performance, as only a small proportion of cars are affected in Beijing, Luo Qi, an insurance analyst with Ping An Securities, told the Global Times. There are about 5 million cars in Beijing.

An auto insurance policy should usually cover for all risks related to vehicles, but insurers only cover for damages to the interior caused by water and the damage to engines, which are most expensive to repair.

To get compensation for damages to the engine, auto owners must buy an additional insurance policy which costs 100 to 200 yuan ($16 to $32). But most of the Beijing car owners just neglect this specific insurance because they think Beijing, which is normally dry, would not suffer heavy floods like South China.

"Only about 30 percent of our customers have bought insurance against water damage," Li Xiaoxiao, a clerk with Beijing Ruizheng Auto Trading, told the Global Times, which means others will have to spend their money to get the repairs done.

It is a good occasion for auto distributors in Beijing to improve their service quality and retain their customer base, Huang Sihua, an auto analyst with consulting firm Frost & Sullivan, told the Global Times.


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