Insurance executive Renato A. Vergel De Dios on Wednesday destroyed the misplaced view among Filipinos that premium paid on a contract without the event covered having actually happened as money ostensibly down the drain.
This relates for the most part to car owners refusing to get a vehicle insurance or getting only the cheapest there is in the market on the mistaken belief that such contracts are a waste of resources.
Regulators actually turn down the registration of motor vehicles unless their owners present proof of a third-party liability cover for when one is involved in mishaps that damage property or people.
“Malungkot ka ba ‘pag hindi ka nabangga?” he asked rhetorically at the online press briefing the insurance executive at BDO Life called on Wednesday. He was discussing insurance contracts as cover for particular unexpected events that a huge number of Filipinos typically brush aside for reasons often related to finances or lack of one.
He said abundant insurance myths and misconceptions held as gospel truths by Filipinos all contribute or explain why the country’s so-called insurance protection gap is so wide it needs trillions of pesos generated over many years to close.
In the case of the Philippines, closure could span as wide as 20 years merely for the industry to mend it, Vergel De Dio said.
But he also acknowledged the gap is not unique to the Philippines as the United States, for instance, has a mortality protection gap requiring an estimated $83 trillion.
That requirement is likewise expanding at the rate of four percent every year and so much more than that required by the Philippines whose own protection gap is a small fraction of the amount.