Personal accident insurance usually has limited coverage

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Persida Acosta

Persida Acosta

Dear PAO,
I will be leaving the country next month to work abroad.  My agency asked me to sign two insurance contracts. One is supposed to be mandatory, and the other a personal accident insurance.  Can you enlighten me on these insurances?
Lander

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Dear Lander,
A contract of insurance is an agreement whereby one undertakes for a consideration to indemnify another against loss, damage or liability arising from an unknown or contingent event (Sec. 2, Presidential Decree No. 612). In essence, its purpose is to pass on the risk of loss, damage or liability caused by certain perils from the insured person to another, called the insurer, who promises to pay for such loss, damage or liability if it occurs.  Given the nature of insurance, the contracts you signed would most likely redound to your benefit as you are given additional protection against certain contingencies. The question now is: What contingencies to the contracts you signed are covered?

The mandatory insurance contract you mentioned probably refers to the compulsory insurance that Republic Act (R.A.) No. 8042, otherwise known as the Migrant Worker’s and Overseas Filipinos Act of 1995, requires recruitment agencies to procure for the OFWs they deploy. This insurance is a unique one covering a plethora of contingencies that an OFW may encounter while working abroad, and arising from his or her overseas employment, such as untoward death, disability, repatriation or labor money claims.
In particular, the law mandates that the compulsory insurance for OFWs should at least include within its coverage: (a) accidental death coverage amounting to Fifteen Thousand United States dollars (US$15,000) payable to the beneficiaries of the OFW; (b) permanent total disablement coverage amounting to Seven Thousand Five Hundred United States dollars (US$7,500) payable to the concerned OFW; (c) subsistence allowance benefit amounting to One Hundred United States dollars (US$100) per month for a maximum of six (6) months payable in case the OFW gets involved in a case or litigation for the protection of his rights in the country where he works; (d) cost of repatriation of the worker, including his personal belongings, if  his employment is terminated without valid cause or if he dies; (e) money claims awarded to the OFW by the NLRC equivalent to at least three (3) months for every year of the migrant worker’s employment contract. Provisions for compassionate visit, medical evacuation and repatriation must likewise be included (Sec. 37-A, R. A. No. 8042, as amended by R. A. No. 10022).

On the other hand, a personal accident insurance is a specie of casualty insurance, which is a type of insurance that covers loss or liability arising from accident or mishap, excluding certain types of loss which by law or custom are considered as falling exclusively within the scope of other types of insurance such as fire or marine (Sec. 174, Presidential Decree No. 961). It is a contract that generally provides for compensation in the event of injuries, disability or death caused by violent, accidental, external and visible events. Please note that the usual coverage of a personal accident insurance is quite limited.  It does not cover all situations resulting to injury, disability or death, but only those sustained from violent, accidental, external and visible events.  This implies that the insured has the burden of proof to show that such an event caused the injury in order to claim from the insurance company.

Be that as it may, please keep in mind that insurance policies are essentially contracts where parties are given freedom to stipulate on the terms and conditions of their agreement, which the courts will not interfere with, unless they are contrary to law, morals, good customs, public policy or public order. Thus, in order to determine the specific coverage of the insurance policies taken by your recruitment agency and your corresponding rights, we suggest that you consult a lawyer and have him review the contracts you signed.

Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.

We hope that we were able to enlighten you on the matter.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@manilatimes.net

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