YOLANDA: DAY 13 (Discussion on Coping and Insurance)
It’s Day 13 of Yolanda, the biggest storm disaster ever experienced in recorded history. If you recall Hurricane Katrina in 2005, that was category 3 when it made its landfall. Yolanda (or Haiyan, its international name) was category 5. The whole nation is still focused on helping out the victims in the affected areas of the Visayas. There are probably very few families in the country who have not yet done their share in helping out. All over the world, help, prayers and well wishes are pouring in.
There have been creative and thoughtful ways initiated by people from all over the world to lend a helping hand. Some put notes in their relief packs, while others are cooking for fund raising dinners. Concerts are held to raise funds. Cellphone companies accommodate donations via text. Restaurants and other commercial establishments are donating one day’s worth of sales. Almost all companies have cancelled their Christmas parties in order to donate the money to the victims, and venues have agreed to waive the penalty on cancelled events. Some volunteers are giving free rides to the victims who arrive at the Villamor air base. Still others are collecting books for the children.
Last Monday I saw Dr. Honey Carandang on tv talk about MLAC, her foundation’s efforts to help victims handle their trauma. She said that it is very important to acknowledge that we, as a nation, are all traumatized by this tragedy, and we should all process it. It’s important for a trauma victim to be able to narrate his/her story to someone who will listen without being blamed or corrected. There should be a feeling of “walang iwanan.” Now I understand why Facebook is still full of Yolanda posts. There are some bickerings happening both on Facebook and international news. “Stop complaining!” “No one should make me stop my criticisms because I’m helping!” “Mali-mali ang sinasabi!” “Why don’t you come down and see for yourself!” Thanks for that enlightenment Dr. Honey, we are all just processing our trauma. These are our coping mechanisms.
Day 13 into Yolanda and we have a huge task ahead of us. After the rescue phase will be the slow and difficult process of rebuilding.
For families who lost their homes, businesses, and breadwinners, my hope is that they have insurance products to help them in rebuilding their lives.
For today’s article I wanted to discuss the importance of insurance in tragedies like Yolanda. I got in touch with our top insurance companies namely Sun Life and Philam Life to gather stories of how their clients’ insurance claims have helped them cope with this calamity. Unfortunately, both said there have been no claims yet. Maybe the victims are still busy rescuing and looking for their missing family members. Maybe they have yet to settle down somewhere before they could move on to their next steps. It’s also possible that there’s a very small percentage among them who are insured.
Both insurance companies informed me that they are prepared to give concessions to their clients who were hit by Yolanda – e.g. simplifying the claims process, less/easier requirements compared to the standard, 90 day grace period instead of the standard 30 days for premium payment, and priority servicing of the victims’ claims and loans.
History of Insurance
The earliest recorded insurance dates back to the ancient era of the Babylonians, even before Christ was born. King Hammurabi’s Code (their written laws) included a ruling on insurance of shipments by their sailing merchants. If a merchant received a loan to fund his shipment, he could pay the lender an additional sum upfront in exchange for the lender’s guaranty to cancel the loan should the shipment be stolen, capsized due to disasters and other unfortunate incidents.
The role of insurance in our life since the time of the Babylonians until today is to reduce the cost of loss. In the ancient sailing merchants’ case, they were willing to pay an extra cost on top of their loan in order to cover the risk of losing their shipment. The proceeds of their trade was the expected source of loan repayment and if they lost their shipment to pirates, etc., the cost of the loan would be too big and almost impossible to settle.
In the same light, we want to insure our big-ticket items like our house, which is usually our single largest asset. We insure it against fire, flood and other disasters because rebuilding our house would be too costly. But there is no need to insure a cellphone or other small appliances whose replacement costs can be shouldered without too much pain. No need to pay insurance for additional warranty. The cost of paying insurance premiums for many smaller items may add up to a significant amount of an unnecessary and recurring expense.
For breadwinners with dependents, make sure that your families are protected when you pass away or are disabled. It is good to review your policies periodically to maximize the benefit vis-à-vis the cost of premium. The idea is to cover the cost of living for your dependents until such time that they can come up with their own source of livelihood. On the other hand, a head of the family whose children have all graduated, leaving him with no more dependents may be better off not renewing his life insurance since he doesn’t have dependents anymore. He can focus on building his retirement nest egg at the least possible cost. Again, there is no need to buy insurance policies for your children or grandchildren who do not have dependents.
When tragedies like Yolanda hit us, we are jolted from our comfort zones. Let’s use this occasion to review our protection and other contingency plans.
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On another note, congratulations to the winners of the three free booths to the Kiddo-preneur Bazaar: 1.) Healthy Taho – by Miguel Sy, Jenica & Jedrick Pacat; 2.) TarTemptations – by Jessie, Gelo & Bea De Grano; and 3.) Toys & Novelty Items – by Christina Siy. Visit their booths on November 30, 2013 at the Alphaland Tents, EDSA corner Pasong Tamo Ext., Makati City.
