Flooded Cars: When to Get Compensation and What You Need to Know

VTV.vn - It is very necessary for car owners to buy physical insurance for their cars, which includes provisions to cover damage caused by flooding.

It is very necessary for car owners to buy physical insurance for their cars, which includes provisions to cover damage caused by flooding.

Conditions for compensation when the vehicle is flooded

In the current system of car insurance types, vehicle physical insurance (often called car body insurance) is a prerequisite for car owners to be paid when their vehicles are damaged by flooding. This is a voluntary insurance with a wide range of protection, including damage caused by collisions, fires, natural disasters, storms, floods or inundation. In other words, only car owners who have purchased physical insurance will be considered for compensation by the insurance company if their vehicles are damaged by floods.

One of the most serious damages when a car passes through a flooded area is the phenomenon of hydrostatic hammer. When water enters the engine combustion chamber through the air intake, the piston will lock up, the connecting rod will bend or the engine block will crack. As a result, the repair cost can reach tens or even hundreds of millions of dong - far beyond the reserve level of many people. However, not all physical insurance contracts automatically pay for this situation. Normally, damage caused by hydrostatic hammer is only insured if the car owner purchases an additional hydrostatic hammer benefit, with an average fee of about 0.1% of the car's value per year - a small but meaningful expense when the risk occurs.

If the contract has a hydrostatic clause, the compensation level usually ranges from 70% to 100% of the repair cost, depending on the specific agreement between the car owner and the insurance company. Conversely, if there is no such clause, the insurance company has the right to refuse to pay for engine damage, even if the car is flooded.

Clarifying the definition of flooding and water hammer, Mr. Nguyen Khac Xuan (CEO of InFair Insurance Support Company Limited) said that flooding is when the vehicle is flooded; while water hammer is when water enters the engine through the air intake, causing engine damage.

“Flooding is a basic risk that is covered by insurance, without having to buy any additional terms. Therefore, when a vehicle is flooded and affects the engine or electrical system, it will be compensated within the scope of insurance,” Mr. Xuan emphasized.

However, he added that not all force majeure reasons are covered by insurance, because these risks are often clearly stated in the insurance contract. Therefore, car owners need to clearly understand the scope of their contract to be ready with options to claim benefits in a full and reasonable manner.

According to Mr. Xuan, if the car does not buy the water hammer clause, but the insurance company excludes engine damage, it is incorrect; because it is flooding, not water hammer, the car owner will be compensated 100%. If the car does buy the water hammer clause, but the insurance company demands compensation under the water hammer condition (usually only 70%-80% compensation) is also incorrect.

“As for the electrical system, some companies exclude damage to the electrical system due to vehicles operating in flooded areas. Vehicles submerged in floodwaters while not in operation are not excluded,” Mr. Xuan added.

Therefore, Mr. Xuan said that the above cases will be compensated 100% by the insurance company to the car owner. If the car is water-hammered, it will be deducted according to the separate water-hammering clause for the engine part.

One of the most serious damages when a vehicle passes through a flooded area is water hammer (Illustration photo)

Insurance claim process

When a vehicle is flooded, understanding and following the correct claim procedure is an important factor in determining the vehicle owner's rights. First of all, the user must immediately notify the insurance company or the rescue hotline at the phone number listed in the contract. Delays may cause the insurance company to refuse to settle the case due to insufficient evidence to verify the scene.

Next, the vehicle owner needs to record the scene with photos or videos , clearly showing the vehicle's location, the extent of flooding and visible damage. This is important evidence to help the appraiser accurately assess the cause and extent of damage. Never restart the vehicle while it is still flooded, because this action can cause water to enter the engine, causing hydrostatic damage and reducing the compensation level, or even losing the right to compensation.

After receiving the information, the insurance company will send an appraiser to the scene or garage to assess the damage. Only with the appraiser's consent will the vehicle owner be allowed to have the vehicle repaired. The claim file must be complete: vehicle registration, insurance contract, photos of the scene, appraisal report and other relevant documents. After the appraisal, the insurance company will pay the repair costs directly to the affiliated garage or refund the vehicle owner according to the agreement in the contract.

Not all flooding situations are fully compensated. Common cases are often divided into three groups. 100% compensation is when the vehicle is flooded while driving or parked, the owner immediately notifies the insurance company, does not start the engine by himself, and the contract has sufficient physical insurance and a hydro-hammer clause. If the vehicle is started while still flooded or is late in notifying the insurance company, the compensation level can be reduced to 70% - 80%. No compensation is when the owner only has civil liability insurance, or the vehicle physical contract does not have a hydro-hammer clause.

In motor vehicle insurance rules, the concept of “compensation sanctions” – or more precisely, compensation reduction – is applied when the insurance buyer fails to fulfill his obligations. These obligations include: preserving the scene, promptly notifying the insurance company, and in some cases, reporting to the police to resolve the accident. If the vehicle owner violates, causing difficulties in the assessment or increasing the damage, the insurance company has the right to reduce the compensation amount accordingly. When there are many violations, the insurance company will apply the highest deduction to ensure fairness and compliance with the rules.

Fast processing, correct procedures, and honest declaration are the keys to helping vehicle owners protect their legitimate rights (Illustration photo)

Advice for car owners when the car is flooded

In the context of climate change causing heavy rains, high tides and flooding to occur more frequently, proactive prevention and understanding of insurance benefits is extremely necessary. First of all, car owners should buy car physical insurance with hydrostatic clause, especially for those who often travel in flood-prone areas. This is a safe and economical solution, avoiding hundreds of millions of dong in damage when an incident occurs.

Second, when discovering a flooded vehicle, stay calm, do not restart the vehicle, record the scene and immediately contact the insurance company for instructions on how to handle the situation. If the vehicle has not been towed out of the flooded area, wait for the rescue team to come and assist instead of moving it yourself.

Third, read the insurance contract carefully before signing, especially the exclusions and deductibles. Each insurance company has its own policies, so understanding your rights and obligations is an important factor in avoiding future disputes.

Finally, quick handling – following the correct procedure – and being honest in reporting is the key to helping car owners protect their legitimate rights. Because in all cases, insurance only really brings out its value when participants clearly understand how to use it, and not just expect “help” when an incident has occurred.

Speaking to VTV Times, a representative of PVI Insurance said that, in response to the impact of the floods, the company has activated a rapid response plan to mobilize specialized staff and prepare scenarios to support its customers in the affected areas so that they can immediately take steps to limit damage and provide timely information. The emergency compensation process due to natural disasters was immediately activated, helping to shorten the time to process documents by 30-40%, and some steps by 80-90%.

Highlights of the emergency compensation process include: Quick approval of loss recovery estimates when there is sufficient basis and documents; timely decision on destruction of damaged goods to avoid environmental pollution; quick advance compensation and flexible adjustment of document items.

As of the morning of October 3, this insurance company had received about 130 motor vehicle damage cases, with preliminary damage estimated at about VND5 billion, mostly due to cars being flooded while moving, parking, or being hit by falling objects.

Source: https://vtv.vn/o-to-bi-ngap-nuoc-khi-nao-duoc-boi-thuong-va-quy-trinh-can-biet-100251010101917792.htm