08:05 | 07/12/2022

Vietnam: What forms of compensation are there in property insurance contracts, and damage insurance policies?

Let me ask: What is the basis of compensation in the property insurance policy, the damage insurance policy in Vietnam? asked Hung from Hung Yen.

What is the basis of compensation in the property insurance policy, the damage insurance policy in Vietnam?

Pursuant to Article 51 of the Law on Insurance Business 2022 of Vietnam, the basis for compensation in property insurance contracts and damage insurance contracts is as follows:

- The amount of indemnity that the insurer or the foreign non-life insurer’s branch must pay the insured is calculated on the basis of the market value of the insured property at the time and place of occurrence of loss or damage and actual loss percentage, unless otherwise agreed upon in the insurance contract. Costs and expenses incurred from determination of the market value and loss percentage shall be covered by the insurer or the foreign non-life insurer’s branch.

- The amount of indemnity that the insurer or the foreign non-life insurer’s branch pays the insured shall not be greater than the sum insured, unless otherwise agreed upon in the insurance contract.

- In addition to paying indemnity, the insurer or the foreign non-life insurer’s branch shall pay the insured necessary or reasonable expenses agreed upon in the insurance contract to provide and hedge against losses, and claims-arising expenses that the policyholder or the insured must incur to follow the instructions of the insurer or foreign non-life insurer's branch.

Vietnam: What forms of compensation are there in property insurance contracts, damage insurance policies?

Vietnam: What forms of compensation are there in property insurance contracts, damage insurance policies?

What forms of compensation are there in property insurance contracts, and damage insurance policies in Vietnam?

Pursuant to Clause 1, Article 52 of the Law on Insurance Business 2022 of Vietnam stipulates as follows:

Article 52. Methods of providing indemnity
1. The policyholder and the insurer or the foreign non-life insurer’s branch can agree on one of the following methods:
a) Repairing the damaged property;
b) Replacing the damaged property with another equivalent one;
c) Paying indemnity.

Thus, according to the provisions on the form of compensation in the property insurance contract, the damage insurance contract includes:

- Repairing the damaged property;

- Replacing the damaged property with another equivalent one;

- Paying indemnity.

Damage assessment in property insurance contracts, damage insurance contracts in Vietnam?

Pursuant to Article 53 of the Law on Insurance Business 2022 of Vietnam, the provisions on loss assessment in property insurance contracts and damage insurance contracts are as follows:

- In case of the policy event that occurs, the insurer or the foreign non-life insurer’s branch or the person authorized by the insurer or the foreign non-life insurer’s branch shall conduct the assessment of loss and damage in order to determine the causes and levels of loss or damage. Costs and expenses incurred from the loss assessment process shall be covered by the insurer or the foreign non-life insurer’s branch.

- Where contracting parties fail to reach any agreement on the causes and levels of loss or damage, independent assessors may be hired by mutual consent, unless otherwise agreed upon in the insurance contract. Where the contracting parties disagree on hiring of the independent assessor, one of the parties may request the Court having relevant jurisdiction or the Arbitrator to solicit the independent assessor for their assessment feedback. The independent assessor’s conclusions or consultative opinions shall be binding upon concerned parties.

How to transfer claims in property insurance contracts, damage insurance policies in Vietnam?

Pursuant to Article 54 of the Law on Insurance Business 2022 of Vietnam, the transfer of the right to claim a reimbursement in property insurance contracts and damage insurance contracts is as follows:

- In a policy event that occurs, if the third party carried the burden of paying compensation for any loss or damage to the insured, the following actions shall be taken:

+ After the insurer or foreign non-life insurer’s branch completes their payment of the insured’s insurance claim, the insured shall assign the right to claim reimbursement from the third party for that insurance claim to them;

+ The insurer or the foreign non-life insurer’s branch may deduct the amount of insurance claim, depending on how serious the insured's fault is, if the insured refuses to the right to claim for reimbursement from the third party.

- When the insurer or the foreign non-life insurer’s branch enforces the right to claim for reimbursement from the third party, the insured shall have the mandate to provide them with required documents and associated information under terms and conditions of the insurance contract.

- The insurer or the foreign non-life insurer’s branch is not allowed to request the insured’s parent, spouse or offspring to reimburse the insurance claim that they pay the insured, except as this requested can cause any loss or damage through their intentional fault.

Thư Viện Pháp Luật

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