Major property and casualty insurers have suggested that the Ministry of Finance raise the rates for typhoon and flood insurance for vehicles next year, after several typhoons struck Taiwan and left hundreds of thousands of vehicles flooded.
But how much the rate should be raised has to be calculated by actuaries before to send the proposal to the ministry for review, market sources said, according to a report in the local Chinese-language media
Many insurers have become extremely cautious when underwriting their new policies on flood and typhoon coverages. Moreover, some of them have become reluctant to underwrite policies that were held by people living in areas that are frequently struck by floods, such as Hsichih or to insure vehicles that have previously been damaged by floods.
The current premium rate for vehicular typhoon and flood insurance is 0.9 percent of the current vehicle's value, which is a uniform rate applied to all local property and casualty insurers, the sources said.
The percentage of vehicle owners in Taiwan who carry typhoon and flood insurance was previously quite low. Of the more than 100,000 vehicles flooded in the wake of Typhoon Nari, only about 200 were able to claim losses, or about 1.5 vehicles in every 1,000.
However, the number of people prompted to buy typhoon and flood insurance policies had increased by 150 percent during the first month after Typhoon Nari hit in mid September, according to statistics provided by the Insurance Industry Development Center (
Typhoon Nari caused significant losses to property and casualty companies.
According to the center, the loss rate for vehicular typhoon and flood insurance in the past three years was 8.67 percent, 4.86 percent and 18.08 percent, respectively.
RSS