8 MAY, 2024

Doggy driver distraction, quake questions, Baltimore Bridge latest

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Marine insurance KL Malaysia is only the start of our story. Whatever your business, whatever your personal insurance needs, we should be able to help you. In this article we’re taking a look at some unusual, interesting and tragic tales, all with an insurance angle. This time we’re exploring dogs in cars, the Taiwan earthquake, and the Baltimore bridge disaster.

Doggy danger for drivers

Everyone knows it’s dangerous to use a mobile phone while driving. But what about your beloved dog? It’s important to keep your pooch under control in the car because a dog can be a lethal distraction. You take your eyes off the road for a couple of seconds to attend to your pet and bang, you crash, or run someone over, or swerve off the road.

As commercial vehicle insurance experts, we understand the problem. But despite the dangers, even though half of US dog owners say they know their dog could cause an accident in the car, Americans are divided about whether the USA needs dog-related distracted driving laws or not. Should it actually be illegal to have a dog loose in your car? It matters when 92% of US dog owners with a driving license take their dogs our driving, and a 60 pound kilo dog turns into a 2700 pound projectile when you crash at just 35mph.

Should dogs wear seat belts or special restraints in a car? Some US states say yes, but in real life only a few have passed legislation to specifically mandate dog restraints: Rhode Island, Hawaii and New Jersey. But other states are starting to bring in general ‘distracted driving standards’ for unrestrained dogs who are considered ‘disruptive’.

Volvo has more to say thanks to their 2019 study. It revealed how drivers with unrestrained dogs were distracted more than 10% of the time they were driving, compared to less than half for people whose dogs were restrained in the vehicle.

An Erie Insurance survey showed how 69% of dogs sit in the back seat, but worrying numbers of dogs sit in the front passenger seat and 13% of people drive with a dog on their knee. 83% of people who drive with their dog say they spend time entertaining the animal in the car, and 45% say they let their dog stick its head out of the window.

The wonderful Desa ParkCity in Kuala Lumpur has been built with dog owners and their pets in mind, designed so residents don’t need to take their pets out for a drive. The rest of us aren’t so lucky. If you take your dog in your private car or drive for a living and have commercial motor insurance, it’s wise to keep your furry friend safely restrained so it can’t cause an accident.

Taiwan quake queries

On Boxing Day 2004 an undersea earthquake in India triggered one of the worst tsunamis recorded, killing 227,898 people. Insurance claims for property damage topped US$1.3bn in total, adding up to the world’s most expensive earthquake for insurers.

Taiwan has a history of dramatic earthquakes because the island sits on a complex convergence zone between the Philippine Sea Tectonic Plate and Eurasian Plate. That’s why if you live in Taiwan and your home is damaged by an earthquake, you can claim on the country’s Residential Earthquake Insurance Fund. It’s good news for the ordinary people whose homes suffered in the most recent 7.4 magnitude Taiwan earthquake, the Hualien quake. But businesses aren’t so lucky and earthquakes can cost commercial insurers a fortune.

Aftershocks don’t help. While there were no injuries or deaths reported, four buildings partly collapsed in aftershock tremors which followed the powerful April 3 quake that killed 17 people.

The monster 2016 Meinkong quake caused financial and social havoc because the epicentre was so close to economic centres. The most recent quake’s source was far from cities and towns so it’ll cost insurers less in claims. But general and business interruption claims are already stacking up and Taiwan’s insurers and reinsurers are preparing for some hard work. Plus, the insurance market is still recovering from covid, which means reserves maybe aren’t as high as they should be.

Most major earthquakes in Taiwan have led to significant claims for business interruption, thanks to the vital role the country’s technology and science sectors play in the economy. The vast majority of policies have been reinsured on the international reinsurance market so the eventual cost will be shared.

Baltimore bridge burden

Reinsurance might prove the hidden hero in the ongoing Baltimore bridge disaster. Like they do for so many policies, reinsurance contracts sit quietly in the background, covering chunks of risk that no single insurer would be willing to insure. It looks like reinsurers will bear most of the cost of the Francis Scott Key Bridge collapse, an enormous financial burden.

Liability insurance for 90% percent of the world’s shipping vessels comes from International Group of P&I Clubs members who insure each other, sharing claims above US$10 million. They’ve also bought billions’ worth of general excess of loss reinsurance cover, good news because the bridge collapse and associated claims will amount to billions and will almost certainly fall into excess of loss reinsurance territory.

Insurers and reinsurers are expecting to get claims for everything from property and cargo to liability, trade credit and business interruption, along with significant legal expenses claims to cover the legal action that’s already emerging. It looks like the city’s officials will sue the ship’s owners, who they see as responsible for the accident because the vessel set sail despite having problems with its power supply.

In the meantime the state of Maryland is still trying to work its way around the problem, which has left at least 30,000 local people unable to commute to work via their usual route, over 15,000 workers left in uncertain circumstances and at least 139,000 people indirectly affected by the loss. The insurance claims could be so large they might discourage reinsurers from offering cover in future.

Whatever happens in your life or your business, there’s probably an insurance policy to protect your finances against it. Ask our team of friendly professionals for advice – we’ll be delighted to help you.