This letter from an insurance broker operating in Subic is about the requirements of SBMA on leasehold properties to insure through GSIS with SBMA as the beneficiary. We normally avoid letters from companies that could be construed as commercial in nature but The Subic Bulletin moderators reviewed the relevant documents and feel this information is of important interest to leaseholders.
WE HAVE CONDUCTED A PROFESSIONAL INDEPENDENT EVALUATION THAT HAS REAVEALED THAT THE MAJORITY OF GSIS INSURANCE POLICIES REQUIRED BY SBMA DO NOT PROVIDE THE COVER EXPECTED AND LEAVE LOCATORS AND RESIDENTS AT RISK OF SIGNIFICANT LOSS.
SBMA recently released a document entitled “Policy Guidelines For Housing Insurance Claims”, SBMA claimed that this document was to “address the growing concern of residents/lessees with regard to getting insurance policy on their housing units, with SBMA as beneficiary”.
Unfortunately instead of achieving the stated purpose this document clearly outlines how exposed lessees are to significant costs.
As we provide insurance services to protect the assets of many investors and residents in Subic we are often asked to comment on this document and the coverage provided by the GSIS policies that SBMA requires leaseholders to purchase. Unfortunately in almost all cases the policies are inadequate and the leaseholder would experience substantial loss in the unfortunate event of a claim.
We have tried to get the situation resolved with SBMA at numerous levels but no one in SBMA seems to be interested in taking ownership of the issue. SBMA ensures that they are protected in the wording of their leases and house rules so it seems that there is no motivation for them to fix the issue. In other words it doesn't matter if the Leaseholder is exposed as long as SBMA is protected. This is not what insurance is all about and all parties could be quiet easily covered if the right policies were applied.
Likewise GSIS ensures they are protected from paying out in many cases and can do so because they are in a monopoly situation, the leaseholder cannot go elsewhere when they discover just how poor the coverage is.
Furthermore the leaseholder’s hands would be tied from taking any legal action to recover underpayment from the GSIS policy because they are not the beneficiary in the policy and SBMA would not take legal action on your behalf because SBMA’s policy is that the leaseholder pays all shortfalls from their pocket.
Let’s take a look at some of the specific points raised in the SBMA document:
- SBMA demands that leaseholders are fully responsible for all restoration or repairs to houses that are damaged in any way while at the same time forcing leaseholders to buy insurance policies that DO NOT provide this level of cover.
-SBMA then makes it clear that the shortfall between the cost involved and the inadequate policy must be borne by the leaseholder. This paragraph also demands that the leaseholder takes full responsibility for any and all unspecified damages but SBMA will not allow them to buy an insurance policy that has such broad coverage, in fact SBMA won’t allow them to have an insurance policy at all as SBMA specifies that all policies must have SBMA as the beneficiary.
The statement “It is also the policy of SBMA that the Resident/Lessee assumes any unrecoverable claim” is deeply concerning, unrecoverable in who’s opinion?
If there is a GSIS policy and GSIS refuses to pay for any reason whatsoever, the leaseholder has no recourse whatsoever, just pay for everything. In this scenario, THE INSURANANCE HAS NO VALUE WHATSOEVER AND PROVIDES NO PEACE OF MIND TO THE PERSON PAYING FOR THE POLICY.
In this Document SBMA also states that all repairs must be performed by one of their “accredited” contractors, This would be reasonable if the whole claim was covered by the policy, but in this scenario of third party beneficiary insurance the “SBMA friendly” contractor could charge any amount at all to consume the insurance money with the least amount of work, again leaving the investor with no choice but the pay exorbitant excess charges of the builder.
As mentioned earlier in this document, we have been trying to get an appointment with someone in SBMA who can discuss this, even with the Administrator himself as he signed the letter but there is no response whatever to our requests.
As we have heard many concerns about this from our customers we developed a policy that can insure the leaseholder for the shortcomings of the GSIS-SBMA deal but with no response from SBMA we have decided to bring this to the attention of all lease holders.
Signed by Nicolas Insurance Brokers
[The Subic Bulletin] If anyone would like to clarify any points on their situation with Nicolas Brokers please contact The Subic Bulletin (thesubicbulletin@gmail.com) for their contact details, we wont post them here as this is not an advertisement.
