KUALA KRAI, Dec 30 – There is nothing in standard insurance agreements which will invalidate compensation in the event a state of emergency is declared in a natural disaster area, the DAP said today.
Its national publicity chief Tony Pua said this while dismissing the reasons given by Prime Minister Datuk Seri Najib Razak and his deputy Tan Sri Muhyiddin Yassin for refusing to declare a state of emergency over the current flood situation in the country.
“On December 27, Najib gave the excuse that if the government announces an emergency, the implications that will arise include the insurance companies being absolved from paying compensation… and compensation arising from damages to property and vehicles is enormous.
“There is absolutely nothing in standard insurance agreements which invalidates compensation in the event a state of emergency is declared, particularly in the event of natural disasters,” he said in a statement today.
Pua, who is Petaling Jaya Utara MP, said he had reviewed the typical property and vehicle insurance agreements of several insurance companies. He said he found absolutely no trace of any exclusion as a result of the government’s declaration of a “state of emergency”.
Referring to a vehicle insurance agreement by the firm Allianz, Pua said the insurance would not compensate if any loss, damage or liability was caused by invasion, war – whether war be declared or not – warlike operation, acts of foreign enemies, hostilities, civil war, acts of terrorism, strike, riot, civil commotion, mutiny, rebellion, revolution, insurrection, military or usurped power; or by any direct or indirect consequences of any of the said occurrences.
The same agreement also stated that vehicle damage will not be indemnified, if any loss, damage or liability is directly or indirectly caused by or contributed to, by or arising from flood, typhoon, hurricane, storm, tempest, volcanic eruption, earthquake, landslide, landslip, subsidence or sinking of the soil or earth, or other convulsion of nature is involved.
“Hence given the above exclusion, it means that vehicles damaged by the massive flood would not be indemnified anyway unless additional flood cover was purchased, regardless of whether the state of emergency is declared,” Pua said. For property damage caused by floods, he said there was better news because such damages were specifically indemnified.
The exclusion terms were, however, not too different. The insurance company would not pay in the event of war, invasion, act of foreign enemy, hostilities, or warlike operations, civil war; mutiny, riot, military or popular uprising, insurrection, rebellion, revolution, military or usurped power, martial law or state of siege or any of the events or causes which determine the proclamation or maintenance of martial law or state of siege.
“Under such circumstance, if martial law was declared, then perhaps the insurance is invalidated. However, a ‘state of emergency’ is certainly completely different from martial law. “Property insurance is also invalidated if any destruction is caused by cessation of work, or by confiscation, commandeering, requisition or destruction of, or damage to, the property by order of the government.
“Surely the government is not seeking to declare a state of emergency to ‘destroy’ the rakyat’s properties?” Pua said. He said the terms of the insurance agreements were practically the same in those of other insurance companies including AIG, AIA, Kurnia, Takaful and Etiqa.
The question now, Pua said, was whether Najib had been misled by his advisers or even the Attorney-General on the matter. “Or did Najib want to avoid at all cost a declaration of emergency for reasons best known to himself, and use the insurance argument as an excuse to justify his decision?” he asked.
Pua also took a dig at Muhyiddin, who reportedly said on Christmas Day that the criteria for a “state of emergency” have not been met, including “the total breakdown of water and electricity supply”. The latter reportedly said the number of evacuees had not reached a critical level.
“We have to consider the total number of people being evacuated, is it in hundreds of thousands?” Muhyiddin was quoted as saying. Pua said the “criteria” mentioned by Muhyiddin had since been met as the number of evacuees has multiplied from 90,000 to more than 250,000 since five days ago.
“Our field trips to various parts of the flood-affected areas have also found that electricity and water supply have been severely interrupted. “One of our relief workers reported that a man had to eat instant noodles cooked in cold rainwater,” he said.
Given the information and the reality that about a quarter of a million evacuees were suffering due to the flood crisis, Pua said Najib must seriously consider declaring a state of emergency to instil greater urgency and effort by all government departments and machinery to alleviate the sufferings of the people and minimise the number of victims affected by the disaster.
The National Security Council (NSC) yesterday in rebutting Pua’s earlier call for emergency to be declared, had said “the fact is, nobody can resolve nor eliminate disasters. Disasters have, and will, always be a part of life so long as hazards and risks exist. “What we can do is to mitigate and reduce the impact of disasters in order to save more lives.
“Even the most advanced countries with the most sophisticated disaster management system and law in place still face hiccups and challenges when facing the brunt of the ravaging forces of Mother Nature.”