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Crash renews interest in insurance

IT’S always after disasters that people talk about the lack of insurance coverage in China. History has repeated again in the case of the fatal high-speed train crash in Wenzhou.

The bullet train crash on Saturday killed 39 people, including two US citizens, and left more than 200 people injured.

Claims to China’s three biggest insurers are still limited, with the known maximum combined claims at 841,000 yuan (US$130,619) from a single insurer, according to data from the three insurance companies.

Twenty-three clients of Ping An Insurance (Group) Co claimed losses in the train crash, with combined payment estimated at 841,000 yuan, the second-biggest insurer in China said yesterday.

It’s the most one of China’s top three insurers has had to pay so far.

China Life Insurance (Group) Co, the country’s biggest insurer, said 8 clients were hit in the accident with combined payment estimated at 448,000 yuan as of Monday.

China Pacific Insurance (Group) said one of its clients died with compensation to the family set at 200,000 yuan. The insurer said five of its clients were injured and two are still missing.

The payouts are considered small when compared with the casualties from Saturday’s crash. In China, rail accidents with death tolls of more than 30 are deemed extremely severe.

The coverage from commercial insurers was clouded by the compulsory railway insurance, which has a maximum coverage of 20,000 yuan per passenger.

Industry observers, including Hao Yansu, professor of Central University of Finance and Economics, said the compulsory insurance coverage is problematic – coverage has remained the same since 1992, but the premium that passengers pay, equivalent to 2 percent of the ticket price, keeps rising as ticket costs have increased significantly during the past two decades.

“Why does coverage remain the same while ticket prices keep rising? Why do passengers pay different premiums even though ticket prices vary, yet they all receive the same coverage? Isn’t that against fair play?” Hao wrote on his microblog.

He also said in many cases commercial insurers give very thin coverage.

“One insurer paid 34,000 yuan in compensation for a client who died in the train crash but didn’t want such an embarrassing example given to the media,” he said. – Shanghai Daily

Posted by on July 27, 2011. Filed under Insurance. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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