Bank unethical practice forced client insured property risk. We love and hate the bank. They forced us to take an insurance policy when the property loan is approved. Someone called them they are the licensed loan shark or legalized Mafia bully the poor and apple polishing the rich. I had a nasty experience with one of the bank staff.
Bank Loan approved
“Mr. Jamin, your housing loan is approved. Please sign on the dotted line on a blank house owner proposal form with a sum insured for a quarter of million. In the event of a fire, you can claim for the said amount.”
“Only fire? What about the storm and tempest, impact damaged or bush or falling, subsidence landslide?
“No, only fire, Mr. Jamin”
“Sorry, no signature, I use my own insurer which is also your panel of the insurance company.”
Fire insurances
I brought 2 fire insurances on the building with all the necessary perils, I assigned a quarter million assigned to the bank another balance $600 000 to my own name to avoid the average clause in the event of an either partial or total loss. Another householder policy to cover fire and full theft for the house content.
Victim
My investor in the unit trust or mutual fund holder was a victim of the bank. I could not help her when signed the fire insurance proposal form as I went oversea excursion with my whole family.
Land Building
She purchased a corner lot land residence building, the property was earlier converted into a commercial lot. She took a 90% margin loan out of 2 million on the purchase price. The bank gave her a favorite low-interest rate with 8 units of condominium plus a small scale factory building in the same year with the same bank. Everything went through smoothly without a hiccup, but not every day was a sunshine day.
The fire razed the building to the ground due to short-circuit. No injury. The car repair workshop closed on Sunday.
Verdict
“Mr. Jamin, can I get back the sum insured of 1.8 million dollars? It was 10 years loan tenure. another 5 more years to service the loan.
“No way, you cannot get the full sum insured as it depends on the reconstruction cost recommended by the fire adjuster. I am not sarcastic, but true, let us wait for the final adjuster claim report.” I consoled her.
She could only claim for 700 000 dollars based on the finalized claim report. Speechless and dumbfound on seeing the recommendation as she overinsured her property and paying the extra premium to the drain.
“Why you take the bank word as gospel after all money is not a problem to you. Take it as a costly lesson learned” I scolded her in her office.
The bank often takes the panel of the real estate appraiser’s valuation report as a guide to insured the property. The 2 million dollars building comprises of (1) the element of profit, (2) the land price tag. Both are not taking into consideration in the event of a claim. The insurer only indemnified you for the loss the building prior to the fire occur. The property appraiser and the bank have a shallow deep knowledge of insurance. Be wise to consult the insurance broker who has the insured’s best of interest. The bank just acts as an agent to the insurer, who has to obey the rule and regulation lay down by the insurer.
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