The destruction caused by Tropical Storm “Ondoy” could result to an P11 billion loss to the insurance industry in terms of insured properties and vehicles, officials of the Philippine Insurers and Reinsurers Association (PIRA) said on Friday.

PIRA is composed of at least 87 major insurance companies in the country.

Michael F. Rellosa, PIRA vice chairman, said of the P11 billion estimated loss in the insurance industry, about P1 billion was allocated to vehicles with “Acts of God” (AOG) insurance provision covering natural calamities like the deluge caused by “Ondoy.”

“P11 billion is just a conservative estimate. This can be just a tip of the iceberg,” Rellosa said during a media forum called “Insured for the worst.”

The insurance executives admitted that they were also caught by surprise by the extent of Ondoy’s destruction.

However, Rellosa, an executive of Fortune General Insurance, stressed that the insurance industry is not on the verge of bankruptcy since it has an estimated net worth of some P57 billion. He said the insurance companies are determined to efficiently expedite the payment of insurance claims the soonest time possible.

PIRA assured that they have mobilized their workforce to process the insurance claims for immediate payment to beneficiaries.

In the case of flood-damaged vehicles, Rellosa said the insurance companies are having difficulty in processing the insurance claims of many units since there is a huge backlog of repair of those with AOG insurance policies.

Ernesto Echauz, chairman of Standard Insurance, said at least 300 from the 30,000 vehicles insured in their company with AOG insurance clause were severely damaged by Ondoy’s flooding.

About 50 percent of the total number of insured units with AOG coverage are concentrated in Metro Manila, he added.

To speed up the processing of insurance claims, Echauz said they rented a big warehouse where the damaged vehicles can be cleaned and later assessed by their personnel to pave the way for their major repair in their respective dealerships.

The Adjusters Association under Val Aboy said they have deployed “third party adjusters” backed up by trained vehicle mechanics to aid their work force in assessing the damage before proceeding to the repair of the car.

The insurance company executives said the waiting time for repair for flood-submerged vehicles could range from one month to three months. They also said that repair cost for flooded vehicles for a compact sedan with small engine could start at P200,000.

Based on his estimates, Atty. Honorio Ramajo, PIRA chairman whose Toyota Camry luxury sedan was among those submered in Ondoy’s flooding, said roughly 20 percent of the country’s five million registered vehicles are covered by the “AOG” insurance clause.

Meanwhile, Senator Aquilino “Nene” Pimentel, Jr. slammed insurance companies for their alleged strict but deceptive car insurance policies that do not indemnify owners of motor vehicles damaged or destroyed by typhoons.

Pimentel said thousands of car owners whose vehicles were wrecked by “Ondoy” feel they have been defrauded in the face of the insurers’ refusal to honor payment claims for the repair of their cars as they classified such incident as “acts of God” and saying this is beyond the scope of their insurance plan. (With a report from Hannah L. Torregoza)