Frequently Asked Questions
Insurance is a system of managing a pool of risks and uncertain losses that may be incurred by individuals or entities that have insurable interests over resources. This system involves the transfer of a/the risk/s from one individual or entity to another, in exchange for a consideration, known as the insurance premium.
It is also a system of pooling the resources of the "fortunate many" to pay for the losses of the "unfortunable few".
The term risk refers to the probability of getting involved in accident that will result to an undesirable loss. It is the potential that an activity or action will result to an undesirable loss. The primary function of insurance is to deal with various risks being faced or confronting the Assured and his/her assets.
In insurance, specific kinds of risk that may give rise to a claim are called perils. It is the danger or hazard that will result to a probable loss arising out of accidents such as but not limited to violent and visible collision at sea, land or air; fire, earthquake, flood, typhoon, etc.
The Insurance Commission of the Philippines is the primary government agency tasked to monitor the operations of all insurance companies in the country.
A life insurance company provides indemnity to the policyholder’s life and limb in the event of injury or death. On the other hand, a non-life insurance company deals with the protection of the Policyholder's various resources or assets and providing indemnities thereto.
An individual or judicial person or firm has varying classification of resources or assets which they utilize or operate for personal or business purposes that provide them with benefit such as shelter, comfort and profit. While these benefits can contribute to the owner's success, damages to such resources or asstes and/or damages brought about by the use of such resources or assets can also cause not only financial setbacks or losses to the owners but can also include serious liabilities to other parties. Owners therefore have the option to secure insurance coverage depending on their specific needs and budgets to protect themselves from the aforesaid financial losses and liabilities.
In general, majority if not all non-life insurance companies operating in the country offer the following insurance lines: motor car, fire, casualty, marine, engineering, aviation, and individual/group/ travel/health personal accident; but, like IAC, some companies also offer customized or specialized products such as but not limited to comprehensive general liability, golfers’ insurance, homeowners’ insurance, robbery/burglary, theft and blanket insurance, property floater insurance, marine hull, etc.
Like IAC, a select number of companies who have been granted an administrative order by the Office of the President of the Republic of the Philippines also offer surety services, such as judicial bonds, civil bonds, criminal bonds, financial guaranty bonds, performance bonds, and many more.
Contrary to the perception of some people, the cost of buying non-life insurance coverage can be very affordable and, in some cases, tailored-fit to the client’s budget. Furthermore, the premium rates charged by non-life insurance companies are very minimal compared to the peace of mind and the relief in cushioning the impact of financial setbacks that may be availed in the event of loss.
For properties, some of the factors which may affect the cost of insurance include the property’s age, type of construction (and/or kind of materials used in construction), location, security features, loss history, amount of coverage or the property's fair market value and other economic factors. For motor car or automotive insurance, the year model or the actual condition of the vehicle itself, the driving record of the owner or driver, as well as any increase (or decrease) in the cost of replacement parts and labor can also be additional considerable factors. Meanwhile, the cost of casualty insurance may also be affected by higher (or lower) cost of medical services, attorney’s fees, inflation (or deflation) in the prices of commodities, etc.