The Bursting of water tank caused damaged to property

The Bursting of water tank caused damaged to property. Do we still remember Condo pool’s glass panels crash to the ground? Fortunately, there were no reports of injury.

Nowadays, finding a water tank on the rooftop is quite common in our home and commercial building. A case I recalled vividly in 1995. A greenhorn in general insurance except for marine insurance which I acquired during 6 years with Robert Kouk dealing with Ship Chattering for both import and export shipment.

A Greenhorn

After a few months on the job training, I closed fire insurance on a double-floor shop retailer doing trading and also, repair sewing machine. On the second year of renewal, the insured called me his machinery had damaged by the bursting of the water tank on the top floor. A crack in the cement ceiling, water gushing down from the roof-top, damaged some of the new and old machinery.

Painful Mistake

Naively I consoled confidently to the insured. “Sure you can claim under the commercial fire to your plant and machinery.” Subsequently, I informed my branch manager about the scenario.

“Sorry, Mr. James, you could not claim a single cent for the water damaged to your machinery.” My branch manager informed the insured the outcome result after checking the policy jacket. I walked off silently, ashaming to face the insured. I learned a painful lesson.

After the incident, I signed up the former Australian Insurance Institute course for self-study. Realizing that I lacked the product knowledge to handle such situation.

Pet Shop

A few years back, there was a case in the state Johor Malaysia, whereby the pet shop was burnt down by fire.  The animal either died of suffocation or burnt to charcoal black. The fire brigade sprayed water to put off the fire. An air-condition dealer on the next door found out that all new and repair air-conditioned had been damaged by the water. The owner lodged a claim report for the damaged to his machinery and his stock.

Smiling pet shop owner was laughing all his way to the bank after receiving the full claim. But he regretted not listening to the agent to buy a loss of profit or consequential loss of profit insurance.

No Claim

The gloomy faced air-conditioned owner cursed himself to save a penny, in the end, he lost an arm. Saving a small amount of money, he lost 200 000 dollars on the stock and wiring damaged. A stubborn businessman did not want the extension peril of Bursting of the water tank when entering into the contract of insurance.

Let say the sum insured be 500 000 dollars. The Rate was merely 0.005%.  He saved 25 dollars but in the end lost Rm 200 000, indeed dug his own grave, There is an excess of 100 dollars. Thus, the final claim would be 199 900 dollars.

Bursting and/ or overflowing of Water Tanks, Apparatus, and Pipes

The policy covers damages caused to the insured property by water or otherwise due to overflowing of water into the tanks by accident or bursting of the water tanks, water pipes or other apparatus like facility water purifiers.

It is advisable to cover commercial building or house fire insurance with the bursting of the water tank. It is an automatic cover for house owner policy. It is not worth to save such a small sum of premium, but in the end, losing an arm and leg like the air-conditioner dealer. It is my advice to those insureds don’t be so calculating and stingy.

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The Bursting of water tank caused damaged to property 1

Lazada MalaysiaThe Bursting of water tank caused damaged to property 2

Who Pays Aircraft Damaged to Your Home

Who Pays Aircraft Damaged to Your Home? The MH 17 still fresh in our memory? The aircraft debris scattered over a large area destroyed not the farm and also the farm house. A corpse that crashed through her rooftop and landed on her bed? The incident that shocked the whole world, and the sour relationship between the nations, and finger pointing at the faulty party. Who was the culprit behind that killed everyone on board, Russia or Ukraine?

It is not wise to claim from the airline at fault, as it takes years to settle your claim. Moreover, the aircraft belong to Malaysia, the incident occurred at Ukraine. One needs to hire 2 lawyers paying an exorbitant legal fee to handle the claim that could last for years.

Aircraft Damage

Aircraft Damage Loss, Destruction or damage caused by Aircraft, other aerial or space devices and articles dropped there from excluding those caused by a pressure wave.

Do we still remember the MH 2133 that crashed on the Tawau, Sabah, Malaysia airport slum area?  The pilot error was the main cause of the accident on 15 September  1955 taking the lives of 32 of the 49 passengers and 2 of the 4 crew, 34 in all.  The plane took off from Kota Kinabalu, Sabah to Tawau, a domestic flight on fine weather condition.

A facilitator coached us on the fire and house owner and householder special peril.

” Aircraft damage including the debris of rocket, satellite, spaceship, spaceship and meteor. The fragment of satellite and rocket which was unheard, but the latest advanced and development of the Superpower 5, it is now common to see the small particle floating in our space. The day will come when it penetrates through the atmosphere and landed on our home. Although it is just a small tiny particle, the great velocity that its travel at lightning speed will have a huge impact damage to our property.  Nobody can image how disastrous it can cause.

2 houses were damaged that insured by 2 separated agents.

A double storey house was insured for 300k with an extensive renovation.  A tiny metal object from the aircraft had caused extensive damaged to the wall and the content. The insurer paid for the property damaged amounting to 35K and the house content another further payment of 15k.  It was the 50k total payment for the claim. The house owner was pleased with his insurance agent, paying a 1k for the reward in helping him for fast handling the genuine claim within 2 months.

Another case the insured who brought his house fire insurance with his nephew, a fresh graduate with 3 years in life and general insurance experience.  The fire insurance with aircraft damage extension, as the insured house was build closed to the Tawau airport. He advised his uncle to buy the fire insurance for the 500k bungalow.  The fire engulfed the houses when the aircraft crashes at the slum area, ripping off all the houses. The aftermath with only the cement and pillar structures remained behind.

The insurer rejected the claim due to the following reason.

1.) It was built on slum area without the government approval. It had no housing architect plan without prior approval by the town council.

2.) The petrol generator light up the house instead of normal government electric supply.

3.) The owner moving into the house without any CFO.

4.) The owner answered the CFO had issued to him in the proposal form.

The honesty of the insured is utmost important when filled all the particular in the proposal form. The agent must update his knowledge before advising his client in obtaining a fire insurance with aircraft damage.

The insurer finally refunded the 3 years full premium to the insured as if there was no insurance on his house. A painful lesson learns by the agent indeed.

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Who Pays Aircraft Damaged to Your Home 3

Who Pays Aircraft Damaged to Your Home 4Who Pays Aircraft Damaged to Your Home 5

Frequent Freak Storm Lashes Malaysia Home

Frequent Freak Storm Lashes Malaysia Home. On 13 March 2017 at 5 pm till 6 pm. The fallen tree branches damaged several cars. Some of the house with the roof gone missing after a severe storm so did the emergency room of the Kulai hospital.

The case is still fresh in my memory. In 2015, The freak storm badly damaged 266 homes. A lot of publicity by the concerned politician with donation thrown in for the ill-fated homeowners. Was the 1k donation enough to repair the damaged home?

At the scene to hear the feedback.

“Luckily, we got the donation from MP, otherwise I do not know what to do.” one voice from the crowd.

” Can we claim the insurance?”

“Fat hope, cannot unless fire burns the house.”

“I thought no need to buy the fire insurance since I had already settled the housing loan.”

“Why not the house owner insurance? a slash agent asked

“This time, I have to spend a fortune to repair the house, my kitchen roof had vanished, the water damaged all my kitchen electrical appliances.”

“You are so lucky, my house the whole roof being blown off.  A pool of water drenched my whole house. The uprooted tree in front my house damaged my car.”

After the brouhaha, life has to go on. There was a great demand of handymen. The repair workmanship had jacked up. They worked round the clock to repair all the house on the cash basis. No money no talk.

One house owner spent on the car porch only realise that insurer refused to pay the full claim even though 150k sum insured of his house. The average law applies in this case.


Where a Sum Insured is stated to be subject to average, this means that if at the time of Damage, the Sum Insured is less than the total value of the Property Insured, You will

(a) be responsible for the difference

(b) bear a proportionate share of the loss

To reinstate the house at the current price would be 300k. It was not wrong for the insurer paid him only 25k.

The calculation 150k/300k x 50k = 25k.

Average Clause

A term used when calculating settlement of a claim when the property insured at the time of the loss is of greater value than the Sum Insured.

In property insurance claim, the claim amount is limited to the sum insured noted on the policy.  The policyholder declared Value is the figure used to determine the premium applied to the policy.

A woman who low-cost house with a sum insured of 50k instead of 22k when she purchased the house. She had a home-owner policy although she finished paid her housing loan. The insurer paid her 8k+, it was out of her expectation. 3k for the roof damaged and another 5k for replacing a new wiring system as the old wire being soaked by the water. Dangerous to stay if short-circuit break out. She thanked me profusely for advising her earlier not to save this kind of money. A few hundred dollars for a month rental while her house being under repair condition.

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Frequent Freak Storm Lashes Malaysia Home 6

The Insurer and Agent not following the Duty of Disclosure

The insurer and agent not following the duty of disclosure. In all the insurance industry, there is a rule that the applicant must the sign in the applicant dotted line before the agent can submit the proposal form to the company.

In the life insurance industry, in order to fulfill the quote or qualify for the company incentive oversea trip, the agent will be very darling to alternative or add any extra rider to earn more commission or quota purpose.

A lady’s voice called me once day.

” Are you Mr. Jamin?” she inquired me.

” Yes, Miss, how can I help you?” I asked her.

” So, you are the modern Justice Bao in the insurance industry, Can you do me a favor?”

” Thanks for the compliment, but I am not a Justice Bao, I do what I can, what are all about?

“It is concerned about my life insurance that I bought from an agent almost 2 years ago. Can we make an appointment next week?  Is that convenience to you?”

“Ok. It fine with me.”

She showed me all the relevant documents.  She wanted to cancel the life policy with half yearly term payment and seeking for the full refund of premium.

At first, I was reluctant to help as the life insurance was not my cup of tea. I specialize in general Marine Insurance. After seeing her persistent to get full premium with the help of a few of her life insurance agents and also a few appeal letters to the Bank Negara, to no avail.

“What did your agent say to you?” I asked her.

“The insurance company will only willing to settle for amount up from the range of RM22k to RM24K”

“Why like that? It was a bargain game to me.” I replied.

“The insurer needed to deduct all the agent’s and up line commission then the balance would refund to me.”

“Why you want to cancel this policy?

“It was not an honest dealing, I did not want any hospital benefit in the policy.

I carefully scan through the proposal form, I noticed there was an alternation.

I wrote a letter on her behalf to the Bank Negara Customer Services Bureau on 23-9-2005. On October 2005, the concerned authority wrote a letter to the insurance company giving 14 days to reply to the complaint letter.

On 8th December 2005, she received two cheques one for RM33 750 being full premium refund and another Rm2 700 being 8% interest charge respectively.


Your duty of disclosure: Before you enter a contract of general insurance with an Insurer, you have a duty, under the Insurance Contracts Act 1996 to disclose to the Insurer every matter that you know or could reasonably be expected to know, is relevant to the Insurers’ decision whether to accept the risk of insurance and if so, on what terms.  You have the same duty to disclose these matters to the Insurer before you renew, extend, vary or reinstate a contract of general insurance.

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The Insurer and Agent not following the Duty of Disclosure 7

Insurer Don’t reveal The Waiver 0f Subrogation Clause

 Insurer Don’t reveal The Waiver 0f Subrogation Clause. The majority of the agent do not practice or have no knowledge how to use it to protect their client interest.

My client called me to read the letter from a lawyer.  The company had been sued by his own brother’s company insurer.

“How did it happen?” I asked.

“My brother company logistic manager asked me to help them to convey a consignment of expensive tile to Port Klang, along on the  NS highway, the lorry met an accident. The vehicle was sandwiched between 5 vehicles, badly damaged the whole consignment. No salvage available. His company claimed his own Good In Transit insurance. After settled the claim one month later, I received this letter to compensate for the insurer loss, otherwise, they would seek legal action against us.

” Did you call his insurer for any clarification about this issue.” I probed further.

” I did not call, as I think after that, my younger brother would not do that. Now I really don’t understand why he did that to me. Moreover, I had a few cases using the subcontractor truck to convey my goods. After the claim had settled, the wrongdoer did not receive any letter to compensate my own insurer”

Both brothers were log headed with other now due to this incident.

“Do you have your younger brother contact number. Can I call him? I requested.

“Sure no problem”

We made an arrangement to meEt each other in the presence of his elder brother.

“Did you sign any letter before the insurer would make a payment to you.? I asked his younger brother.

“Yes, I signed, here is the photocopy of the insurer letter.” he answered me.

“This is a subrogation letter, did you agent explain this to you?”

“Yes, he said no signature, no payment”

“Can I see your insurance jacket?” I asked the younger brother.

After examined the policy, I let the brothers comparing both Good In Transit policy wording.

“There was no waiver of subrogation clauses in the younger brother policy. Thus the insurer could sue you on behalf of your younger brother.”

What should we do now?”

I told the young one to write a letter to insurer waiver of subrogation stating the full reason for it. It is up to the insurer to decide any further action against the older one.

Waiver of Subrogation

A waiver of subrogation is a contractual provision where one party agrees to limit the rights of its own insurance carrier and usually pays an additional premium for a special policy endorsement allowing for coverage under such a situation. Many construction contracts and leases include the waiver of subrogation clauses. Such provisions prevent one party’s insurance carrier from pursuing a claim against the other contractual party in an attempt to recover money paid by the insurance company to its insured or to a third party in the resolution of a covered claim.

This clause can be inserted the landlord and tenant policy.

The past chairman of Pan Lorry Association of Malaysia invited me to Kuala Lumpur had a seminar with the members on how to the waiver the subrogation in their Good In Transit policy.

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Insurer Don't reveal The Waiver 0f Subrogation Clause 8

Bank Misleads Lawyer Buying A Wrong Policy

Bank misleads lawyer buying a wrong policy. It is often that the banking stuff takes for granted lawyer would understand all the insurance term, clause, warranties, and exclusion.

Missing Gold necklace

I recalled my own brother case years ago.

“Jamin, since you are in the insurance industry, can you help me to claim your sister-in-law gold necklace?”

“How did she lose it?”

“She placed the necklace on her dressing table locker after a late wedding reception in Singapore. After coming back from our Sunday breakfast with the kids. she discovered the maid was gone. The necklace was missing too, thus she suspected her maid took  it.”

Theft Policy

He brought a theft policy from his neighbor, a retired secondary English teacher. I was not able to help him as I had a marine claim need me to finalized.

While on my way to the bank, I met my lawyer named Miss Y.

“Jamin. would you please help me to study my burglary policy?”

“Why out of sudden, you need to buy such insurance? I said sarcastically to her.

She explained to me that she has lost 5k dollars over 2 incidents, 1st 3k in cash and followed another 2k. She believed her staff it took it. There was no sign of forcible entry or a CCTV being installed in her posh office.

“Is it a full theft policy ?” I asked her.

“What is full theft insurance?” she questioned me.

“You are a lawyer, you are pulling my leg!”

“Jamin, I really don’t understand all the jargon words. I just locked it in my locked safe.”

Full Theft

It is an optional cover, is available to certain qualified clients on payment of additional premium. It covers theft even if there are no signs of breaking in or out pane or tile to claim for theft if you have this extension.

Duplicate/Master Key

For instance, using duplicate or master key or even that you are tricked into opening the door for thieves would be covered. It is a higher risk cover with an additional premium. It is also for this reason that this cover is not given to just anyone, especially those with high moral hazard. It is not a standard alone policy, you need to have other class of insurances with the same insurer.

My brother case was the job of the maid who absconded the gold necklace and also the lawyer’s staff who was 5k dollars richer. The full theft extension would response for both the events even though there was no sign of forcible entry or exit


There is an excess of 250 dollars under this optional. This means that you will have to bear the first RM250 for every claim involving theft where there is no sign of forcible entry or exit. If the lost is 5k dollars less 250 excess. The quantum claim amount will be 4750 dollars.

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Bank Misleads Lawyer Buying A Wrong Policy 9

Young Widow Not Getting Full Claim Money Seeking Legal Aid

Young widow not getting full claim money seeking legal aid. Poor young widow, her hubby died of electrocution while working in the plastic product manufacturing factory. A case of which I personally handle the claim.

Two buddies set up a plastic factory upon graduated from abroad. They sought the financial assistant from both parents.It was a three-man show during the initial period later transformed into 50 employees.

Young Supervisor

One of them was none other than the young supervisor. Before he became a father of a boy, his wife working there. They were blessed with a company car and a rented house. A roof over their head, life was easy and a good income to provide a meal on their table. Good life did not last long.


I received a call from the owner of the factory around lunch hour.

“Mr. I am coming to your office to pick you up. We need to go to the mortuary asap.”

What a rotten day! It was 6 days before 1998 Chap  Goa Mei. In the line of duty, I had no choice, but to follow him. A young woman was sitting with him.


“I do not want to have a post-mortem” she sobbed out of anger and hurt, “he already died  grisly, why he needs to undergo another damage to his body.”

“His company had taken out a group personal accident insurance for all the employees, your hubby was insured for 100k. If no post-mortem was carried out on him, the insurer could argue that he died of heart attack, there would be no claim for him. Madam, did you want that way?”

“Ok. Did what the company say, I have no saying in this matter.”

The post-mortem stating he died of electrocuted, not because of his heart problem, even though he had a bulky body.

3 months later, the young widow came over to our office to make inquiry concerned the claim money. My staff told her that the full payment had settled.

No claim money

“Why I did not get a cent?” she yelled at the stuff.

” The cheque had issued in favor of  the company name and it had already cleared.”

“The cheque should be issued to me, not the company, the life insurance company had given the cheque under her name.” she demanded to get the full payment.

“Madam, did you pay for the personal accident insurance premium for your husband?

“No, it was paid by his boss”

“Since the company made the payment, the payment shall make to the company. We could not seek to redress this kind of issue as we did according to the procedure.”


” I would suit the insurer to court and seek my fair compensation”

“Did as you pleased, I could help you in this matter, I am truly sorry, I knew how painful and sorrow to lose a husband at your age.”

What transpire between the two, I had no knowledge about it. The stuff narrated it.

I called her to our office and explained the outcome of the court filing. What was the chance of winning? The lawyer will not highlight to her the losing consequence.

She received 2000 dollars from “Malaysia SOSCO” until she died or marry with another man. If she died earlier, her younger son would get the compensation until he aged 18 or upon graduated with his first degree.

Since her husband died in the south, both of them hailed from the north, all the repatriation and funeral expenses were borne by the boss. She later informed me getting the balance of 65K from the boss.

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Young Widow Not Getting Full Claim Money Seeking Legal Aid 10

An agent helps the insured with the fraud claim


An agent helps the insured with the fraud claim 11

Have you ever heard that an agent helps the insured with the fraud claim? You might ponder is it possible? But it is true, I did stumble across such an unscrupulous agent in my 27 years in the insurance industry. A lot of ignorance insurance agents with poor knowledge selling an insurance policy. Whom to blame? The agent or the insurer?

Insurance fraud claim with the aid of an agent

While during any seminar, I mingled with a lot of insurance agents. An insurance agent in the insurance industry for a few decades, but the level of knowledge in insurance is instead skin deep. They live in their comfort zone, never want to upgrade themselves by selling the easy product i.e motor insurance. Another. class of insurance knowledge is minimal

In the insurance agent training session, I remember vividly a senior with three decades of experience in the insurance industry.

Insurance Fraud Claim Intention

“Can we have two or more fire policies for the same insured like the case of life insurance?” he asked me in the class.

“Fire insurance unlike life insurance is reinstatement with the principle of contribution in the event of a claim. Life insurance all policy will pay for the assertion, but reimburse for medical expenses.”

I further explained to the class how does the contribution works in the event of a claim.

In Malaysia, an insurance agent representing one life principal and two general insurance principals, respectively.

An agent can act in life and general insurance. One day, he Approved me for the claim, as he was confused with the final claim settlement.

Fire Fraud Claim Damage by Insured

A fire broke out in the furniture factory, engulfed the storeroom and destroyed all the content. Nevertheless, the owner insured the store-room for a million covering finished product.

” Why the owner gets only half of million dollars to claim instead of one million.”

He further explained that the owner insured the store with two insurers for half-million dollars each. By right, the insured should get a million dollars. The insured intend to seek legal action against both the insurers for the claim settlement.

“Don’t be so naive; the insured will lose more on legal and court fees without any chance of winning the case.” I enlightened him.

“Why not? it is the insured’s right.” He argued with me.

“The insured has so much money to spend on legal and court fees. Why not use the fund to spend to rebuild the storeroom? In your client case, the contribution principle applies.”

Contribution to avoid insured fraud claim

The contribution principle in insurance is a rule that specifies what happens when a person buys insurance from multiple companies to cover the same event, and that event occurs. For example, the principle says that if the policyholder files a claim with one company, that company is entitled to collect a proportional amount of money from the other involved insurance companies.

 The factory store was insured for half a million dollars from both insurers namely A and B. The actual total loss amounting to 500,000.
How does contribution work?

Thus A and B can contribute by equal shares i.e., 250,000 each, therefore add up to 500,000. Hence, it is called contribution by equal shares.

The loss is shared equally among all the insurers that have valid insurance on the risk, up to the insurer’s limit of liability.

Either A or B pays out 500,000 individually; which is known as the contribution by limits.

All insurer’s share of the total loss is the percentage of that loss that the insurer’s policy limit represents as part of all insurers’ applicable limits.

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An agent helps the insured with the fraud claim 12

Bank Promotes Outdated Mortgage Reducing Term Assurance

Bank Promotes Outdated Mortgage Reducing Term Assurance.  Why is it so? The bank placed priority on their own interest first instead of the borrower on the housing loan. Too sad, the public willing to accept the bank offer and incorporated as part of the loan amount.

I came across a case in the rural area. It was a heartwrenching story during my course of study CII. By giving and help the need community I enhanced my insurance knowledge.

” Madam, why are selling cookies along the busy main road with 3 three kids in toll.” I inquiries with a sympathetic eye.

“Sir, it is my fate, I have a 4 school going children, besides my bedridden husband. Already 4 months passed, God willingI I hope he can recover soon. According to government specialist there 50% chance of recovery. He fell in the bathroom after coming home from factory working as an operator for the past 18 years.”

She showed me a letter from the bank stating that her husband needs to pay the arrear 3-month installments of housing loan, otherwise, their home for 9 persons will up for auction. She sobbed quietly behind the curtain.

” Does your husband purchase an investment link policy”

” Here it is ”

” It is mortgage reducing term assurance policy!” I advised her.

” How do I know? the bank asked me to pay the installments”

Likewise, it is same as my son case.

After securing my son loan from a bank, the loan officer asked my son to sign the mortgage reducing term loan form.

I asked her” if my son is bedridden, does he has to pay the housing loan installments?”

” Yes, of course” the loan officer replied.

” If my son after settling this loan, he want to have another second house, Does he need to buy another MRTA? ”

” Yes, of course”

The Cons of MRTA

No cash surrender value, no loan.

During you tenure loan period. If you need a small loan to cover your emergency fund due to short-term unemployment or hospitalization. You need 20 000 dollars. One need to present the original investment link policy to the insurance company, you will get the fund with 24 hours during the working day.  There is a small interest charge from 7-8% charge for the outstanding loan, but it is not compounding.

Bed-ridden, continue paying installment

Despite out of job due to illness, you still need to pay the installment. Coupling with the higher burden medical fee, no job. Can the borrower continue paying the loan installment?

TPD or Death

Can the survivor suffering TPD and the family living on fresh air and the sunshine? After paying the balance housing loan, you get the title out from the bank without any encumbrance. No cash in hand, eat bread and drink plain water? In the investment link policy, after paying for 15 years, and the housing loan balance let say 50,000 for another 5 years. If you are insured for 200,000 plus 15  years on dividend amounting to 96,000.00 The surviving family will get (200,000 + 96,000-50,000=246,000. In the case of MRTA, you only a title of the house for free staying, enjoying the fresh air and the sunshine.

MRTA Interest

The silent killer, since the whole premium at the inception date which is rather huge, in order not to add burden to the borrower. The bank sheds the crocodile tears by incorporated part of the loan installment. Another interest is added.

Buying a 2nd home

MRTA is not transferable, you need to have another policy for the 2nd housing loan. As one aged, the premium will be higher, even worse, whether you are insurable or not due to ill health. With the investment link policy, you need not buy another policy but a smaller amount of sun insured unless the 1st policy is insufficient to cover the 2nd home loan.

Critical illness

Unless the insured die of critical illness or natural death, the MRTA will response.  If you are suffering from 36 major critical illness for e.g cancer, you still have to serve your housing loan.

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Bank Promotes Outdated Mortgage Reducing Term Assurance 13

Conman Gets Full Insurance Claim Settlement?

Conman Gets Full Insurance Claim Settlement? It is a conman world. Smart Conman trying to cheat insurer for million of dollars fraudulent claim.

Is it easy to cheat insurer claim money? A True story how did the conman cheat the insurance company.

Garment factory requires a lot of labor.  It is a labor-intensive industry,  Malaysia is now losing the edge to Cambodia, Vietnam, China, and the India sub-continent.

Fire Broke out

Fire engulfed an export based garment factory in the wee hours of the morning in a small town. The whole building with the contents turned into ashes, only the skeleton structure building remained behind. Thank God, no injury reported.

The next morning, the owner of the factory enjoying the buffet breakfast in a newly open business class hotel. They looked calm as if nothing happened.

Calmed Owner

“Did you know that your factory was burned to the ground? A group of reporters asked the couple.

“Yes, I know, what can we do, nothing, let the insurer deal with it”. the couple calmly answered the reporters.

“What is the estimation of loss.”

“A few of million dollars”


The preliminary local adjuster report totally coincided with the Bomba report.  A short-circuit was the main reason that fire broke out.

The insurer seemed the case as hanky-panky. A foreign adjuster arrived to gather the sample of the ash. A day later, he was found in the police lock up for the trespassing private property. Who called the police? It was none other than the owner couple.

When a claim was reported, the insured right has transferred to the insurer. The insurer’s adjuster has the right to entering the insured without the prior approval of the insured.

The local insurer bailed out the foreign adjuster.  Later on, a forensic report confirmed the fire broke out due to arson. All the ashes contained a trace of kerosene. Kerosene carpeted the whole building. Who was the culprit? If it is a malicious damage by the third party, the fire insurance will response.

Laugh to the Bank

Full settlement cheque was above to issue. By the twist of fate, the conman couple will laugh all the way to the bank. But it was not materialized.

Financial Score

A further investigation revealed that the oversea buyer rejected a shipment worth half million dollars. Reason being poor workmanship and not up to specification. The seller is bound to pay the ocean freight and other expenses incur. Since it was a branded shirt with the company logo, it is very difficult to dispose to the foreign market.

It was a partial shipment of the whole letter of credit. It can only to sell at the night bazaar as a rejected stock with 1/4 of the full shipment price. A loss of 375 000 dollars.

Like a lurid drama, a team of the financial expert to revealing financial standing of the ill-fated company. The confirmed letter of credit used to apply for pre-ECR (export credit refinancing with 4% interest per annum) from a local commercial bank.  It had successful obtain 80% of the letter of credit. Is it a conman world?

The final truth the local adjuster and local authority had the coffer full by the conman couple. They also paid the underground to set arson of the building hoping the insurer will pay the over insured. Normally conman often over insured their property, it is a high moral hazard to the insurance industry.

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Conman Gets Full Insurance Claim Settlement? 14