Chartis - AIU to Offer Double Indemnity After Philippines Hostage Crisis

Posted on Aug 25, 2010 by Sergio Ulloa (G+)

It has emerged that Chartis Insurance, formerly American International Underwriters, was the underwriter for the travel insurance policies held by 4 of the victims in the recent Philippines hostage crisis. Tour operator, Hong Thai Travel, has promised to provide additional compensation to the remaining families not holding travel insurance coverage. The incident on Monday, August 23, left 8 Hong Kong tourists dead, and spurred mass outrage across the South-East Asian region. Hong Thai Travel has promised HK$ 320,000 (US$ 41,025) in compensation to each victim's family. Of the total compensation being paid out by the tour operator, HK$ 300,000 (US$ 38,461) is travel accident compensation, while the remaining HK$ 20,000 (US$ 2,564) is a death gratuity. However, of the families of the 8 victims receiving the Hong Thai Travel compensation package, 4 families stand to receive an additional HK$ 1,000,000 (US$ 128,205) due to the fact that they had purchased extra travel insurance coverage from Chartis Insurance, Hong Thai Travel's official insurance partner. Chartis Vice President, Wong Fu-Tat, said "the level of compensation for victims has been doubled, from HK$500,000 to HK$1 million, under insurance covering accidents caused by public transport." As such, the insurance company had labeled the situation as "special." Additionally, Chartis has said that "Special Arrangements" were in place to help the survivors of the tragedy, with the company providing up to HK$ 1,000,000 in Philippines Medical Benefits, and covering further medical treatment in Hong Kong up to HK$ 100,000 (US$ 12,820). Under a typical Chartis/AIU travel policy, the victim's family would only be able to claim up to HK$ 500,000 (US$ 64,102) due to the fact that all the victims were on a tour, organized by a tour agency. Under the Chartis policy, "Accidents while in a Common Carrier" can be indemnified up to HK$ 1,000,000. However the policy wording states:

The Benefit will be payable to the Insured Person who suffers an Injury while riding as a fare paying passenger, and not as pilot, operator or crew member in or on, boarding or alighting from any Common Carrier, or the carrier as arranged by a travel agent, or while the Insured Person is riding in an automobile at the time of Injury during the insured Journey outside Hong Kong which, directly and independently of all other causes shall result in any Event provided in the Benefit Table½

In this case, as the victims were on a tour, they would normally be excluded from coverage under the "Accidents while in a Common Carrier" benefit, and covered under the policy's "Other Accidents Benefit;" where the company is only liable for up to HK$ 500,000 in compensation. However, Chartis, recognizing the extremity of the situation has doubled the total amount for which families of the victims can claim. This affair only serves to highlight the need for comprehensive travel insurance coverage. As we have previously illustrated, travel insurance is one key component of a vacation which often goes overlooked. However, in the event of a serious situation, such as the hostage taking incident, it is important that coverage is in place. The differences between the compensation being received by the families who had insurance coverage in place and those who did not is HK$ 1,000,000 (US$ 128,205); and should serve to highlight the importance of adequate insurance coverage while overseas. The last victim of the Philippines Hostage crisis was the Hong Thai Travel tour guide, Masa Tse Ting-Chunn, who has been widely praised in Hong Kong for phoning colleagues in Hong Kong and alerting them to the crisis. Tse's family will receive the HK$ 320,000 accident benefit and death gratuity from Hong Thai Travel, in addition to his annual travel insurance benefits and labor insurance coverage.