The destruction of vehicles, property and attacks in which the lives of citizens have been put in danger, and there have been injuries and even deaths in the last few hours, raise the question in the country of how insurance companies act and whether insurance coverage passes. some changes in relation to this situation which is framed within the state of internal armed conflict after the President of the Republic, Daniel Noboa, signed Decree 111 and declared the country in that state.

How do insurance companies understand this status? Fernando Lippke, a private consultant for personal insurance and financial business with 10 years of experience in the sector, explains that insurance companies adhere to the status indicated by the Government through their official and authorized communications. It ensures that coverage does not change beyond what is stated in the contract, within which there are exceptions for certain circumstances.

Daniel Noboa declares an internal armed conflict at the national level and orders military forces to neutralize the groups

“Each contract has different exclusions, but they are all approved by the Insurance Administration,” explains the expert. However, Lippke analyzes that under this premise, companies analyze if the event in which the incident occurs is declared an act of terrorism (or other excluded) by the authorities, there would be no coverage.

He explains that if he strictly refers to the contracts, there would be no coverage, but he also assures that many companies apply their own policies for the benefit of the insured and provide coverage even though the contract excludes it.

One of the cases of destruction of vehicles occurred at dawn on January 9 in Azogues, in the province of Cañar, when a trailer carrying new Kia and Hyundai vehicles in Cuenca was attacked and set on fire. This newspaper consulted with the brand in Ecuador, which states that the vehicles “were insured and that the insurance company had already approved the coverage of the incident … most importantly, no employees were affected,” the brand reports.

However, the incident occurred before President Nobo signed Decree 911.

A trailer with new vehicles was set on fire in Azogues

Given the situation, Genaro Baldeón, executive president of the Association of Automobile Companies of Ecuador (Aeade), rejects that fact. “Our solidarity with Kia Ecuador for the attacks that caused material damage in the transport of new vehicles, despite the fact that the cargo was protected.” It also warns car companies to take precautions when transporting vehicles, warehouses and in commercial facilities.

In the case of life insurance, Lippke makes sure to always provide coverage. They cover death from any cause except suicide in the first two years.

However, the impact of the current situation could be reflected in the future with an increase in the cost of coverage. “Unfortunately, any event that causes widespread damage to property and people’s health negatively affects insurers’ results and that is then passed on to their expense.”