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Insurers awash with car claims in south China's Guangzhou

05-18-2010 11:02 BJT

BEIJING, May 18 (Xinhua) -- Since torrential rains battered the southern city of Guangzhou and flooded more than 15,000 cars over the past week, claims have soared, leading insurance companies to suspend water damage coverage for car owners.

As for those seeking to make a claim, many insurance companies have told the car owners that they may either not compensate or fully compensate the claimants because they never specifically purchased water damage insurance for their vehicles.

"Now I really do not know where or how to buy water damage insurance for my car," Huang Guansen, one of the car owners that suffered from the flooding, was quoted by Tuesday's China Daily.

An insurance agent, surnamed Chen, from the Tianhebei branch of the China Life Insurance Company, said water damage insurance was available from his company about a year ago and he does not know why it was suspended.

According to insurance company insiders, many companies have suspended coverage for water damage because of the high risk posed by the owners living in Guangdong. Situated in the country's subtropical zone, the province is frequently hit by storms, typhoons and torrential rains, which lead to huge economic loss every summer.

"A car owner usually paid less than 100 yuan (14.6 U.S. dollars) for water damage insurance a year, but the insurance companies may have to pay compensation valued at more than 100,000 yuan when a car is damaged by flooding, especially if the engine is involved," an insurance insider said.

According to the Guangdong bureau of the China insurance regulatory commission, 15,000 claims for compensation for the flood-hit cars have already been filed in the past week.

And the total amount of insurance compensation has been estimated to reach more than 130 million yuan.

Car owners and insurance companies are now busy negotiating over compensation deals.

Some insurance companies have said they will abide by the relevant laws, insurance regulations and contracts in paying compensation to car owners.

This indicates that those who had not already purchased water damage and other related insurance for their vehicles will not compensated, insiders said.

Editor:Jin Lin |Source: Xinhua

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