Homeowners Insurance

[Pak Tani]

MSIG has a premium calculator for their home insurance. It shows that the tariff rate is 0.1996% of the sum insured. Does that mean they are gambling on a less than 1 in 500 (years) chance that there will be an earthquake that can completely destroy your house? Does Zurich Re know about this??

 

[Helpful Herbert]

It's quite comforting to know that insurance companies think the chance of such an earthquake is so low.
The last really major one affecting Jakarta was in 1699, which damaged most houses but only destroyed a few of them. Perhaps we're due a repeat although building standards should be better these days.

 

[Samoerai]

MSIG has a premium calculator for their home insurance. It shows that the tariff rate is 0.1996% of the sum insured. Does that mean they are gambling on a less than 1 in 500 (years) chance that there will be an earthquake that can completely destroy your house? Does Zurich Re know about this??

Interesting calculator. Premiums are much higher than Chubb, though.

I guess that the insurance companies have built a model, based on earthquakes in the past + the time past in between the earthquakes. Small earthquakes and big ones. Big ones don't occur that often. And then calculated, based on that dataset, the chance of a big earthquake happening again. Or they calculated the expected years of an earthquake happening again. Maybe the result is a chance of 0.20% per year, resulting in 1 major in 500 years. So, based on the big eartquake in 1699 in Jakarta, the next big one is in 2200.

You can ask ChatGPT how the companies built their models.

 

[snpark]

You think they ever pay out on earthquakes? Is your house in an earthquake zone? What precautions did you take to make it EQ safe?

Who surveyed the foundations? Do you have a well? Is it concrete? Or bricks? Etc.

What is there is a fire from broken gas pipe caused by EQ. And flood? Etc etc.

That's the gamble. Even if you have it will they pay out. And how much? Thousands? $100,000's ?

 

[Bad_azz]

You think they ever pay out on earthquakes? Is your house in an earthquake zone? What precautions did you take to make it EQ safe?

Who surveyed the foundations? Do you have a well? Is it concrete? Or bricks? Etc.

What is there is a fire from broken gas pipe caused by EQ. And flood? Etc etc.

That's the gamble. Even if you have it will they pay out. And how much? Thousands? $100,000's ?

Gas pipes? You mean the bottles?
I am super-curious now, I had no idea that Indonesia had piped gas

 

[Samoerai]

You think they ever pay out on earthquakes? Is your house in an earthquake zone? What precautions did you take to make it EQ safe?

Who surveyed the foundations? Do you have a well? Is it concrete? Or bricks? Etc.

What is there is a fire from broken gas pipe caused by EQ. And flood? Etc etc.

That's the gamble. Even if you have it will they pay out. And how much? Thousands? $100,000's ?

Well, if there is an earthquake and homes are destroyed. This will be on national tv. People being denied their claims while having earthquake insurances, will have a strong case.
Not to mention that insurance company will get bad publicity and will lose a lot of clients.

On the other hand if they pay out immediately, they will get a lot of new clients, like you

 

[snpark]

People from hurricane Katrina still waiting for money
I have one friend here her husband died in a crash 11 years ago she still waiting for the life assurance payout

They just drag and drag

 

[snpark]

Well, if there is an earthquake and homes are destroyed. This will be on national tv. People being denied their claims while having earthquake insurances, will have a strong case.
Not to mention that insurance company will get bad publicity and will lose a lot of clients.

On the other hand if they pay out immediately, they will get a lot of new clients, like you

I rent. Not my problem if the tower collapses. I might sue for whiplash though

 

[Pak Tani]

If your own car breaks in an accident this is for most people painful but not leading to your personal bankruptcy. If it's still on lease-buy there is mandatory insurance. If you paid for it already, well you don't have a car anymore, but life goes on. It's very different if you crash into 5 other cars and a store front and injuring/killing people, causing a million USD or so in damage.

I agree with you, but I think over here things work a little different. Back home, the 3rd person liability is the obligatory part of your car insurance. Over here, when I checked the site of MSIG, the 3rd person liability was an optional box that you could tick. You could choose from several sums to insure, with 100 juta being the maximum. That is not going to cut it if you cause major damage or injury to someone.
But maybe MSIG is not representative to the insurance industry, I don't know.

If 1,7% of indonesians had an insurance in 2018, how many of them with a vehicle insurance would have ticked that box to insure third party liability for the full 100mln? Not many, is my guess.

From what I heard they settle damages se-ikhlasnya en semampunya. I have never heard someone went to court over it or was bankrupted, although that must happen also.

 

[snpark]

If you have a mortgage on a property the bank insist on insurance
If it falls down in an earthquake how you going to sell it to repay the mortgage

You better pray it pays out at least what your mortgage is.

And again what about if you own an apartment and the tower collapses. You only own the leasehold. Not the freehold.
So you could end up very screwed

 

[Samoerai]

And again what about if you own an apartment and the tower collapses. You only own the leasehold. Not the freehold.
So you could end up very screwed ...

... or dead.

 

[pantaiema]

Home insurance is the combination of Building Insurance and Content Insurance. Both Building Insurance and Content Insurance could be purchased separately, but most people prefer to buy Home Insurance as it is typically cheaper rather than to buy them separately. Also it is more practical as there is no more argument who will pay the damage building Insurance or Content Insurance in the event where a claim need to be made.

Each to their own but I personally fail to understand why do you need an Earthquake Insurance if you are just renting, you do not own the building. Have I missed something here ?. A Building Insurance is typically required by the lender if you are taking a mortgage, but AFAIK in Indonesia, Building Insurance where the earthquake cover must be included is not required by lenders. Although. some lenders may offer it as an optional add-on to your mortgage.

Another possibility is that in the event of magnificent high magnitude earthquake causing the building to collapse, you might not need an insurance anymore.

 

[Samoerai]

Have I missed something here ?

Yes, of course one only needs a earthquake insurance when owning a house. Owning an apartment here in Indonesia, I don't know if an insurance is going to be of use.

 

[serious_fun]

So you could end up very screwed

Or on a plane fleeing the country, much like the person in Turkiye after the horrible quake recently.

 

[flavus]

Yes, I was glad there is a earthquake insurance in Indonesia. Insurance companies in other countries don't offer an earthquake insurance. In the Netherlands no possibilities, not enough clients. So must be worthwile for Chubb to offer this kind of insurance.

Interesting. Though I guess the risk of getting an earthquake in the Netherlands is so low anyway, right?

On my insurance earthquake protection is an extra rider - I didn't take it because the chances are so slim. The insurance includes wind damage though. Flood insurance is sold separately, and is mandatory if the official flood maps (which is rather outdated) flag your house as being at high risk.

 

[fastpitch17]

Middle Eastern part of the city where the elevation is about the same as the northern part. +100 meters above sea level. Western part is higher. Southern part is at sea level. We don't flood in our area. There are some low sections of roads that will fill a few inches. Have good runoff to the south where they have torrential runoff flows through their streets and yards heading to the bay.

House is concrete with aluminum trusses. Only thing that could burn is plastic plafond unless someone decided to build a campfire inside.

Earthquakes. We rent. If house is damaged, we move. Could have some furniture damage but easily repaired or replaced. We have a lot of Jati and that stuff is probably stronger than the cement.

No, we can not justify home insurance.

 

[Samoerai]

Interesting. Though I guess the risk of getting an earthquake in the Netherlands is so low anyway, right?

On my insurance earthquake protection is an extra rider - I didn't take it because the chances are so slim. The insurance includes wind damage though. Flood insurance is sold separately, and is mandatory if the official flood maps (which is rather outdated) flag your house as being at high risk.

Yes, in Holland .. horror stories about insurances not paying out after e.g. floods is not really heard of. Mostly because the Dutch insurances are really decent. Yet, last couple of years - because of climate change - The Netherlands, focused on mitigating sea floods risks, have been attacked in the back by flooding of rivers like the Maas. Happens more now frequently, like every year. But even then most of the claims by families are paid out (70%). The other 30% cases: not insured or wrong insurance or some other technical issue, like re-insurance by some foreign insurance company, in the cases of companies like supermarkets.

But, because of the frequency of river floods, insurance companies have a big problem, mostly because of the lack of clients. Only clients living close to the river, want a flood insurance, so not enough paying clients.

 

[flavus]

Middle Eastern part of the city where the elevation is about the same as the northern part. +100 meters above sea level. Western part is higher. Southern part is at sea level. We don't flood in our area. There are some low sections of roads that will fill a few inches. Have good runoff to the south where they have torrential runoff flows through their streets and yards heading to the bay.

House is concrete with aluminum trusses. Only thing that could burn is plastic plafond unless someone decided to build a campfire inside.

Earthquakes. We rent. If house is damaged, we move. Could have some furniture damage but easily repaired or replaced. We have a lot of Jati and that stuff is probably stronger than the cement.

No, we can not justify home insurance.

Yeah if you are renting ... in other countries you can get renter insurance (for your properties).

But TBH as a homeowner I chose not to insure the content of the house either. It's just ... stuff.

Once we furnish our basement then maybe, since that part is more likely to get water damage.

 

[Samoerai]

Yeah if you are renting ... in other countries you can get renter insurance (for your properties).

But TBH as a homeowner I chose not to insure the content of the house either. It's just ... stuff.

Once we furnish our basement then maybe, since that part is more likely to get water damage.

I calculated recently because of the Chubb insurance, what it would cost me if I lose all of my stuff. It's around 500 juta. So, an all property risk insurance for 1,6 juta per year is 'no brainer' for me.

 

[Helpful Herbert]

I calculated recently because of the Chubb insurance, what it would cost me if I lose all of my stuff. It's around 500 juta. So, an all property risk insurance for 1,6 juta per year is 'no brainer' for me.

I hope you keep all receipts, because they will only pay what you can justify with a receipt (minus a depreciation charge)