A Palm Oil Lorry Tanker Crashed Into Your House Can We Claim Fire Insurance?

A Palm Oil Lorry Tanker Crashed Into Your House Can We Claim Fire Insurance?

A Palm Oil Lorry Tanker Crashed Into Your House Can We Claim Fire Insurance?

Plunging palm oil lorry tanker crashed into the front portion of the house causing severe impact damage to the hall, situated beside the main road, whom to claim for impact damage? Nowadays, commonly seeing your house crashed by road vehicle, it highlights in the daily newspaper.

What is Impact Damage?

Impact Damage defined as, Loss of or visible physical damage to home, with the  or destruction caused to the property insured, due to impact by any Rail/ Road vehicle or animal by direct contact not belonging to or owned by

a) Insured or any occupier of the premises or

b) Employees while acting in the course of their employment.

On my way to Johor Bahru via the country road instead of NS highway, enjoying the clean and fresh air drive along the row of green oil palm plantation dotting a skeleton of Felda scheme houses along the way.

“Bang….Bang….Bang” Startling to hear a loud voice disruption the echoed silent of scorching sultry afternoon.The loaded tank full of palm stearin had rammed downhill into a house, carpeting the whole front hall yellowish and spilled onto the ground.

Curiously dashing out from the kitchen, a retiree couple clad into their “sarong” trying to investigate the outcome, I too dashed down to help to pull out the driver that stuck in the driver seat, suffered a minor injury with the bruise on the hand and forehead, dumbfounded and speechless. Advising, the driver to lodge a police report, consequently, soon the venue gathered with people, after brouhaha, nobody had an idea how to handle the situation.

To Whom Can We Claim

Now, the main question here was as to whom we shall claim for the impact damage to the house. I had asked so many people in the seminar or even at the scene.

“Claim from the lorry insurance?” All replied me such an answer, similarly, for the elder couple’s son too.

“Can you show your house fire insurance, please? I asked the son. Examined closely the detail of the coverage, I assisted him to call the insurer’s adjuster to survey the hall damage to ascertain the loss of the property.

To their dismay, ” why not claim the lorry insurance i.e. thirty party claim.”  Yes, indeed, it is logical to file a third party-claim.

Third party claim

The cons

  • How long to wait for the thirty party claim?
  • Why enrich the lawyer’s pocket?
  • Do you know when the motor adjuster will finalize the accident report?
  • To what extent can we claim the emotional damage?
  • It is time-consuming to attend the court hearing postponed one after another.
  • Can you afford to keep on applying for unpaid leave?
  • Not afraid you house being burglar into? You prefer to wait for 3 months or 2 to 3 years to reconstruct your house.
  • Cover the shortfall after deduction 20% of the legal fee. If the insurer pays you $100 000 to reinstate the hall, Can you make up another $20 000.00 shortfalls to rebuild the damaged property?
Fire or Homeowner Insurance

Having a house owner or fire insurance with an extent of impact damage excluding insured’s own vehicle, you claim directly with the insurer submitting the original police report, photograph before and after damage, and of course the plan and construction bill. If your house adequately insured, no average will apply, you will reimburse fully.

After you sign the subrogation claim letter, let the insurer deal with the faulty party rampage your house. It solves all your teething problems and subsequently saves a hefty amount of litigation fee.

The following episode, the same insurer, the same occupations, with  2 different agents, 2 different treatments, will unfold.

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A Palm Oil Lorry Tanker Crashed Into Your House Can We Claim Fire Insurance? 1

Utmost Good Faith Binding Between Insured And Insurer Part V

Utmost Good Faith Binding Between Insured And Insurer Part V

Utmost Good Faith Binding Between Insured And Insurer Part IV

Two policies cover the same consignment, small claim response, but the insurer rejected bigger sun insured claim.  The story of the insurer not following the Utmost good Faith rule by the insurer.

In Malaysia, it is common for the insured or a transporter to protect themselves by purchasing Good In Transit policy even though the shipper did cover either CIF or FOB. The reason being the logistic company often being sued by a shipper for negligent of carrying their good.

2 Policies

One of my clients had been with me for several years.  Every year the insurer issued the insured name as   XXXX Logistics and nominated sub-contractor on 19 July 2000 for RM250,000.00 each and every loss for 1st policy.

They secured another big contract carrying handphone chip from a manufacturer. Another insurance with the inception date from 1 Nov 2000 for RM500,000.00 for each and every loss with the insured name as XXXX Logistics and YYYY Manufacturer., F.T.R.R.& I. for 2nd policy.

A daylight theft

On 23 March 2001, I received a call from the CEO of the XXXX Logistics.

” Mr. my vehicle no 123 was stolen along with the good around RM950,000.00. It parked at NS Highway rest station 2 cars lot away from the police patrolling car during the Friday prayer time. The driver went to answer his natural call. The lorry vanished in 10 minutes later.  A daylight theft. What shall I do now?” He panicked

” Calm down and relax, tell your driver to make a police report at the nearest police station. I will take care the rest.  Do not worry you had the cargo insurance.” I calmed him down.

We proceed with the claim.  To our horror, the insurer rejected the claim for 2 reasons.

Reject claim

2nd policy, ” Warranted carrying land vehicle must not be left unattended at any time.”

1st policy, YYYY Manufacturer was excluded from that policy.

Wasn’t it the biggest joke in my insurance career?

I did my best to appeal on behalf of my client to the Bank Negara Insurance Mediation Bureau. The insurer replied to my client they only settle for the small claim amount on the 1st policy. i.e RM250,000.00.  After realizing from other sources, the insurer terminated my agency contract with them.

Like adding fuel to the fire, when my client filed to claim the RM500,000.oo with a local prominent lawyer. The insurer canceled the 2nd policy with effect from 3 June 2001.  This policy is deemed to canceled with a refund of the pro rata premium. Did the insurer carried out Utmost Good Faith Binding Between Insured And Insurer Part IV?

The lawyer after checking all my qualification, she asked me to be an expert’s opinion for appearing in the court.

Court Case

In the court, the defendant’s lawyer asked me ” Mr, are you an agent or broker for XXXX Logistics”

To the amused of everyone present in the court.

The Judge said, “Mr. is representing the insured, he is a broker.”

Argument

” The same event, the same driver, the same consignment, the same time, the same logistics and the same manufacturer, the same insurer, the same broker, the same location, the same theft, why the insurer does not apply the same treatment”  I argued my point out.

After hearing the defendant lawyer congratulated for winning the case.

A  palm oil lorry tanker rammed downhill causing very severe impact damage to the front portion of the house beside, the main road. Whom to claim for damaged in my coming post?.

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Utmost Good Faith Binding Between Insured And Insurer Part V 2



Utmost Good Faith Binding Between Insured And Insurer Part IV

Utmost Good Faith Binding Between Insured And Insurer Part IV

Utmost Good Faith Binding Between Insured And Insurer Part IV. The insurer has a bigger role in Utmost Good Faith binding both parties namely the insurer and the insured.

Liver Transplant Tragedy

Friday, June 7, 2002, on Singapore Strait Time carried the title ” Transplant tragedy:  Heartbreak for wife  ‘He died not knowing I was pregnant’ Transplant tragedy: Too much money, Too little time Frantic rush to raise funds. Liver Transplant tragedy”  Donor available, but critical delay over cost proves fatal ”  No Money, No surgery.

A sorrowful heartbreak story flashing across the local daily newspaper. People cursed the heartless surgeon. The Insurer refused to pay the so-called cash admission in the local private hospital. He later was transferring to another private hospital in Singapore for a liver transplant. The donor was none other than the late patient’s elder sister who sacrificed her own liver and spending the countless sleepless night to raise the fund for her beloved younger brother.

Jaundice

The local hospital diagnosed him suffering from jaundice. He needed to pay admission fee RM5,230.00.  The medical card was supposing to be a cashless admission. Finally, the consultant confirmed he suffering from Hepatitis B.  Like adding salt to the wound, time delay, patient in critical condition, the ambulance rushed him off to a Singapore private hospital to perform the liver transplant.

No money, no surgery

“First you need to find the right donor for a liver transplant, secondly, S$300,000 full payment as cash deposit before the surgeon can perform the operation.” the hospital concerned informed them, “No money, no surgery

To cut the story short, the money was raised, the elder sister admitted to hospital for the liver transplant on the following day.  Her youngest brother could not hold longer, was called to be with The Lord in the wee hours of the morning.

Whatever is gone, ash to ash dust to dust, but the living need to go on with their life. The deceased family filed a claim for sum insured of RM75,000.00 to the general insurance company for the medical card claim. The shocking reply from a party of the insurer.

Not Claimable

It is with deep regret to inform you that the medical expenses for the treatment of your condition are not claimable under the following policy exclusion:

General Exclusion (11) – ” suicide or attempted suicide, self-inflicted injuries, self-destruction or any attempt thereat while sane or insane. ”

General Exclusion (9) – “… treatment of alcohol dependence syndrome and drug addiction/abuse.”

After countless visiting the hired lawyer, no outcome. But the lawyer charged the family for RM2,000 to open a file. Also, written a numerous of appeal letters to Malaysia Mediation Bureau turn out to be fruitless.

It was a coincidence I stumbled across his sister, after a few chat, only did we realized we were colleagues before. We chatted over a high tea.

” Jamin wong, can you help me to claim my late brother case. Since after we departed, you continue with Chartered insurance study, I am sure and you have the confidence to help me.” she pleaded me.

” Sure, It is my pleasure to help those genuine claim, but those lawyer’s correspondence letter please do not give to me, I want the proposal form, cover note, policy jacket, and rejection claim letter. If I had 90% winning the case, I will write an appeal letter on your behalf to Bank Negar Insurance Mediation Bureau, is that ok with you.

In the proposal form, the brother did write that he was a hepatitis B carrier.  Also,  there were no exclusion clauses specify in a few years renewal. After close study of the liver specialist’s diagnostic report confirming the patient died of an acute liver failure due to Hepatitis B.

Insurer did  not honor Utmost Good Faith

The insured had carried the duty of Utmost Good faith in disclosing he was a hepatitis B carrier in the proposal form. Whereas the insurer did not honor the Utmost Good faith on their part.

Happy Ending

With just one A4 paper size written in the appeal letter.  All happy ending . On the 30-7-2004, the widow received a cheque amounting to RM75,000 from the insurer.

Two policies cover the same consignment, small claim response, but bigger sun insured claim was rejected.  Another story not follows the Utmost good Faith rule by the insurer, more in the next episode.

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Utmost Good Faith Binding Between Insured And Insurer Part IV 3Utmost Good Faith Binding Between Insured And Insurer Part IV 4
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Utmost Good Faith Binding Between Insured And Insurer Part IV 5



Utmost Good Faith Binding Between Insured And Insurer Part III

Utmost Good Faith Binding Between Insured And Insurer Part III

Utmost Good Faith Binding Between Insured And Insurer Part III.  How did the insured make use of the loophole of the Utmost Good Faith?

I eager to prove my capacity to earn the non-motor insurance profit commission besides the normal agent commission during my first year begin as an agent/broker after I quitted my full-time job in a general insurance company after passing the Chartered Insurance Institute (UK) with marine insurance major.

I combed every inch of the industrial estate regardless the size of the factory. During the hot and sultry dried climate in the equatorial zone.  I walked into a cafe to quench my thirst.

” Are you an insurance agent? An elder man approaching me.

” Yes, how can I help you sir.,” I politely replied him.

After the normal exchange card, he invited me to his office nearby to discuss Good In Transit policy. The first year, everything went on smoothly. During the second year, He introduced his son to me as he is planning to retire soon, spending more quality time with two grandsons.

His son- a middle man dressing like a school teacher, well groom and decently formal dressing. Mr. Christ has vast experience in logistic working in mainland China and a short stint in United State. When he took over his father business, my nightmare to begin. 1st year, there was four genuine minor claims wich was duly honored and full settlement by the insurer.

Upon renewal, I reevaluation the risk and adjust the premium accordingly. During the duration, they were 2 minor claims within 2 months, followed by 2 major claims one week after another consecutively.

As I was away handling another claim, after finish my job, I paid him a cordially visited him on my way home.

“Mr. Christ, very lucky you have the GIT insurance to cover the claim.”

” Mr. since I bought the insurance from you, I have the ri….ght to claim.Am I right? He said with a sure to claim tone.

” Obsoletely sure, you have the right.”

I recorded our conversation and passed it to my friend Dr. Robby who was then a prominent psychiatrist.  His analysis it as Mr.Christ has a high moral hazard.

I personally investigate the claim, read every wording of the submitted documents. Thus, the four claims were delaying for some time.  Mr. Christ blew up of his anger, he hired one lawyer to file the claim, another more veteran and prominent one followed suit.

The insurer called me up to meet the 2 hired lawyers with the presence of the insured in the insurance office.

“The last claim more than RM400,000 of consignment, the contract is ex-work, the buyer is from oversea, does your client .i.e  the transporter has any insurable interest on the good? I questioned the well-prepared lawyers.

” No” they replied me.

Claim repudiate

Another 3 lorries that make the claim were not with the contract of affreightment signed up with the transporter. The outsiders’  lorries were not in the subcontract list payroll.  The insured had abused the weakness on the annual carrying. Besides, anyone lorries with a genuine claim can forward to him, of which he took a lion share of the claim money.

The insured had a high moral hazard on the fraud claim.

Finally, The insurer discharged all their liability from the renewal date, and fully refund the paid premium to the transporter.

Utmost good faith has a bigger role binding the insurer, more in the next episode.

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Utmost Good Faith Binding Between Insured and Insurer Part II

Utmost Good Faith Binding Between Insured and Insurer Part II

Utmost Good Faith Binding Between Insured and Insurer Part II. What is Fraudulent Misrepresentation? It is also known as Concealments.

Concealments

Concealment is closely related to misrepresentation—it is the failure to disclose material information. However, before an insurance company can deny payment for concealment it must prove:

  1. the insured knew that the fact was important in regard to the insurance being applied for;
  2. and there was an intention to defraud the insurer.

Misrepresentations and concealments are common strategies used by people with higher risks and lead to adverse selection by insurance companies, which, in turn, raises premiums for everyone else.

In Brief, it means that the insured ought to disclose all the material fact to the insurer whether to accept or reject the risk. The insured purchased an insurance policy has the intention to cheat the insurance company. Those high moral hazard insured resulting into a lot of bad or fraud claims that will eventually lead to insurer rises up the premium across the spectrum of all insured. Which is unfair to the consumer, like in the case of third party motor insurance.

2 decades case

I remember a case vividly more than 2 decades ago.  I befriended with a young lad who family running a few types of business in a booming town.

One day ” Jamin, since you a newbie in the corporate marketing in general industry. I would like to introduce one of my brother who is operating a hotel here.” he asked me.

” Ok sure, so kind of you, Mr. William, I am sure to give the utmost support to your brother’s hotel business.” I politely reply him.

Smooth Sailing

During our meeting, after a few casual chats. We started our serious business. After all the smooth presentation with question and answer. We closed the deal.

In the fire proposal column ” Have you ever suffered any loss or made a claim on the risk now proposed or any other risk owned by you whilst trading in the above or any other named? if yes, please give details of the claims.

He (Mr. Robert) answered ” NO”.

After issued a cover note and the cheque being collected I bid him goodbye. My sixth sense was telling me, something was not right.  So easy to close the deal with just one meeting.  Very Suspicious. My mind was pondering with a string of unsolved puzzle. The brother accepted all the term and condition so quickly and with no questions asked.

Upon reaching the office, scanned every detail of the insured’s documents like the form 24 and 49. The was the finding:

In the previous company XYZ, the insured  Mr. Robert was one the director in form 49. In the presence company WWW, Mr. Robert was only a shareholder cum Chief Operating Officer in form 24.

XYZ, the previous hotel was located on the present WWW with the same address. The fire completely destroyed the old hotel. The reason was due to arson based on the adjuster’ report.  The earlier insurer paid the full settlement of the fire claim.

Doubt Arises

Why the insured change the insurer even though, the company received the full payment.

The insured Mr.Robert named was not in form 49 in the current hotel that he is managed.

After much consideration, I informed the insured with letter thanks for supporting our company, but,  however, we have to decline his offer plus a full refund of the premium.

Risk reject

We rejected the risks due to the following:-

The insured had high moral hazard character.

The previous insurer really had turned down the offer by the insured. How high moral hazard plays a significant role in the insurance industry in my next post.

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Utmost Good Faith Binding Between  Insured and Insurer Part II 7

 



Utmost Good Faith Binding Between Insured and Insurer

Utmost Good Faith Binding Between Insured and Insurer

Utmost Good Faith Binding Between Insured and Insurer. What is utmost good faith? It is one the important principle that often overlooks by the agent and the insured. Why is it important?

Utmost Good Faith

Utmost good faith is a common law principle (sometimes called Uberrimae Fidei). The principle means that every person who enters into a contract of insurance has a legal obligation to act with utmost good faith towards the company offering the insurance. A person must, therefore, always be honest and accurate in the information they give to the insurance company. The insurance company also has a responsibility to act in good faith in all its dealings with the insured.

In a common layman term, its meaning that when insured signed the insurer’s proposal form. The insured must honestly answer all the question in the proposal form. Likewise, it is the same with the insurer after scan through the proposal form. The acceptance of the insurer when issue the policy contract must be acted in utmost good faith from the inception date of the policy.

The Important of Utmost Good Faith

When one party of the contract, be it be insured or insurer in breach of the contract, the other party can null and void the contract from the day of the breach.

When I was in the general insurance company. One the agent dealing with an insured a young lad called Mr. Robert whom they classmate during the secondary school. They had lost contact with each other almost a decade.

Personal Accident Policy

” Mr. Robert, since a father of a bubbly 2 years young boy, do you have a personal accident since you are riding a motorbike to working in Pasir Gudang shipyard.  It is very dangerous to ride on the road, Why not signed up for a personal accident from me?”

” OK, no problem.” he signed up. ” In the column, what is your present occupation?” He put “Clerk” Indeed he was a bank clerk after finishing Upper secondary.  He did not pursue further his tertiary education due to financial constraint.

One fine day, Mr. Robert called his agent stating his right hand was torched by the welding rod during working. A contract worker on call basis, his boss did not enroll him for the Socso benefit. It burnt 30% on the epidermis of the skin. The doctor put him on medical leave for a month. The agent assisted him to claim the medical expenses and weekly benefit.

No Claim

The insurer repudiated his Claim based on Utmost Goof Faith. The claimant was furious the claim been denied by the insurer. A meeting between both insured and the insurer was held at the office with the presence of the agent.

” Why put your occupation as clerk instead as a welder? I questioned him.

” I was told welder cannot get a personal accident policy, moreover the premium is very high.”

” No, it is not true,   a welder is a hazardous and high-risk occupation, the premium is quite a substantial comparing with other normal class of occupation. Luckily, it was a 30% burn on your right-hand epidermis of the skin that does not hinder your normal duty. If you want to continue with the policy, we have to adjust your premium on pro rata basis for the balance period of the policy year. Isn’t it ok with you” I explained clearly to him!

After some discussion with his agent, he finally accepted our term and condition continuing with the policy with an additional premium.

What will happen when there is a fraudulent misrepresentation in Utmost Good faith? Be patient, it will roll out soon.

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Genuine Fire on Building, No Claim Settlement Insurer Denial

Genuine Fire on Building, No Claim Settlement Insurer Denial

Genuine Fire on Building, No Claim Settlement Insurer Denial, No Foul Play exist.  Why No claim? 

When I joined the public listed insurer. The branch manager gave me a heap of a mountain of claim files. I went through diligently till the wee hours of the morning in the cozy comfort of my house. After one month local training, off I attended another 2 weeks HQ training by the senior underwriting and claim manager.

There was one case that caught my full attention. A genuine fire broke out razed a motorcycle repair shop to the ground.  The insurer refused to pay a single cent to the pathetic insured even though there is no foul play involving. Why? Why? Why?

As I was a greenhorn in the insurance industry, I noted down the detail of the insured contact hoping to interview the ill-fated insured. My mind just wanted to solve the puzzle. No wonder the 1st chapter in any insurance textbook, the insurer alway denial any liability whatsoever.

By pull string. I managed to interview Mr. So & So.

” Another guy from the insurance company, G ….et…ou? He yielded at me at the top of his voice. I startled by thunder voice, almost run off as if there was a tiger on hot pursuit me from behind.

Luckily, I was with my friend during the commotion. I hold a deep breath and using my gentle and soft voice to pacify him down.

” Sorry, Mr. So & SO, I am not here to rub salt in your wound, but rather trying to rectify the mistake so that in future the public would not be the next victim like you that had undergone a painful experience.” I consoled him. Here goes his part of the story.

When he purchased the shop lot under construction from the famed developer. He took 90% margin loan from another public listed bank having their own insurance company. At first, he intended to use the shop lot as his own office but later changed his mind due to the masses traffic jam during the office hour. It was vacant for 2 years after obtaining the CFO.

Every year, the bank would auto renew his shop lot fire insurance with auto debit from his current account, with no question by both parties. On the third year, he rented out to a motorcycle repairing shop with spraying painting been carried out at the back of the shop lot. Everything went fine, without any mishap.

On the fifth year, a night fire broke out burnt the shop lot into ashes. The main causes due to the spraying painting been carried out in the shop. The fire claim adjuster wrote detail final report to the insurer.

Insurer repudiates the claim based on the change of occupation on the building. A vacant risk is less fire hazard comparing with the spraying painting motorcycle repair shop. Thus the insured pay a lesser premium. In this case, neither the bank is ignorance or the insured is cheating, which is hard to prove. But I know Mr.So & So still paying the bank not existed shop lot. How pitiful!  That the “Utmost good faith” in my next series.

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Genuine Fire on Building, No Claim Settlement Insurer Denial 9





Banking Secrets Revealed, Why Pay More? Part III

Banking Secrets Revealed, Why Pay More? Part III

Banking Secrets Revealed, Why Pay More? Part III. 

What is Indemnity?

Recompense for loss, damage, or injuries; restitution or reimbursement.

An indemnity contract arises when one individual takes on the obligation to pay for any loss or damage that has been or might be incurred by another individual. The right to indemnity and the duty to indemnify ordinarily stem from a contractual agreement, which generally protects against liability, loss, or damage. 

In a very simple general term, the insurers pay only the reinstatement or replaced the damaged in cash.

What is reinstatement?

Reinstatement means the insurer will replicate another building the same as before prior it has burnt or tore down. Nowadays, It is very tiresome to reconstruct from the insurer point of view. It is time-consuming.

The most prefer alternative choice for insurers is to indemnify in cash. Let us say that to reconstruction you damaged new house need only RM200,000.00. In the earlier, you take 90% margin loan of RM700,000. Thus the bank will require you to insured your new house for RM630,000.00. It the rate of premium is Rm0.17 per hundred. The total premium is RM1,071.00 (RM630,000 x 0.17)  Thus , your pay extra premium (RM630,000-200000 x 0.17) = RM731.00 for the whole tenure of your housing loan. Isn’t it a wastage?

Interest Protect?

Who interest is the bank protected?. It is obviously, the bank, Not yours.

Since you have mortgaged your house to secure a 90% loan margin on your new house.  Let us examine further on the small fine printed on the insured name in the policy jacket:  Mr. So & Mrs. So as owner AND X BANK AS CHARGEE .F.T.R.R. & I.

Suppose after serving your housing loan for 10 years, there is still another RM300,000.00 outstanding including the principal and interest. Misfortune strikes you on 10 years house, the house is completely burnt to the ground. The insurers will pay the bank first, any balance will go you.

Image the pathetic situation you are caught in the mess. No house to stay, yet you are still serving the balance Rm100,000.00 house loan.

Banking Secrets Revealed, Why Pay More? Part III

To recap

  1. Pay extra for the RM731.00 as premium.
  2. No house to stay, but still serving your house loan promptly and diligently without any delay to avoid penalty on late interest.

If there is a genuine fire razed your building to the ground, the insurers don’t you a single cent, yet you have to pay the housing loan the promptly without unduly delay. Coming soon in my next post.

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Banking Secrets Revealed, Why Pay More? Part III 10





Banking Secrets Revealed, Why Pay More? Part II

Banking Secrets Revealed, Why Pay More? Part II

Banking Secrets Revealed, Why Pay More? Part II.  Please refer to my Banking Secrets Revealed, why pay more?

Can the ground that erected your house can fire it down?

When you buy a landed property, be it freehold or leasehold, the housing developer will charges you the land price too. In Malaysia, it is charged based on per square foot or per square meter respectively. Let us say, the land price is valued at RM100,000.00. Do we have to add RM100,000 as part of the sum insured? Can the fire burn the land? Why pay the unnecessary extra premium? Does the insured benefit during the claim?

Don’t be naive, who is the housing developer running on charity build the house without any profit?

What is the profit margin of the housing developer? Perhaps, they add 25 to 60%. It is again all depend on where is the location and the proximity to the city center or the commercial business district.  The types of building material, luxury ceramic tiles, type of furnishing, the complexity of the house structure and the quality of or workmanship.

A 3-floor bungalow builds on silt with the steel piling structure will add a substantial building cost than a 3-floor bungalow on a solid flat land.

Do you move into to your new house as where the basis is?

Everybody will love their first home. Can we move into a new house with only the basic house structure being provided by the housing developer? Most people will add iron grilled to their door or window.  Some even changed the entire floor tiles front to back with various color or pattern of tiles. More electrical switch point or terminal will install, so do the hot water or solar system and air-conditional.

Not spending a fortune to have extensive renovation.

How much to spend on your first new home renovation?  

A rule of the thumb from the expert is about 25% of the house purchase price. It is not worth to spend a fortune up to 50%  of the total purchase.  It is unwise to burn a hole in your pocket. In Malaysia, people even hired an interior design from design to supervise the project until completion. Some even demolished the all the partition and reconstructed the whole building.

Now the question is

How much to insured the new house? One of the four principles of insurance ” Indemnity” basis come to your mind by now? How do bank being part of the insured when insurer dealing with your claim.

Find out it in my coming next article.

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Banking Secrets Revealed, Why Pay More? Part II 11



Banking Secrets Revealed, Why Pay More?

banking-secrets-revealed-why-pay-more?

Banking Secrets Revealed, Why Pay More?

To those newbies who is buying their first home, please read the Banking secrets revealed, why pay more?

Buying your first ever house is a dream come true for those yuppies. But be aware what the banking secrets revealed, why do you have to pay more during the time when you are not in a fat city. Especially those newly wedded couples with a shoestring budget, coping with the wedding expenses and furnishing their sweet home.

After a numerous viewing.

From one house to another house, finally, you settled with the new a single semi- detached double. Price tagged RM700,000 in a suburban area.  It is 5 kilometers drive from to the town central, your office just a stone away from the MRT.

Armed.

Armed with all the necessary documents, both the couple goes to their favorite X bank for a 90% margin loan which is duly approval.

Mr. Y, the X bank manager give you the widest sincere smile, cordially invites the couple to his cozy private office.

“Mr. & Mrs.  So and so, it is the bank procedure requirement to buy a fire or house owner policy for your new house, since it is 90% margin loan over the purchase price of RM700,000, thus the sum insured will be RM630,000.00.  Please sign here on the dotted column.” the bank manager advised their client.

” Sure, no problem.” Mr. & Mrs.So politely pen on the dotted line.

” If you have any question about the fire insurance, please don’t hesitate to call me or my staff, I will be happy to serve you at all time” the bank manager affirmed the blissful couple who are on the way to Hawaii for their honeymoon.


Here are the questions for anyone to answer.

Banking Secrets Revealed, Why Pay More?

  1. Can the ground that erected your house can fire it down?
  2. Don’t be naive, who is the housing developer running on charity build the house without any profit?
  3. Do you move into to your new house as where the basis is?
  4. Not spending a fortune to have extensive renovation?

All the answers will unveil soon in my next post.

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Banking Secrets Revealed, Why Pay More? 12