25 JUNE, 2024

Westport blaze, art arguments, Gen Z insurance and the Montreal Convention

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Westport blaze, art arguments, Gen Z insurance and the Montreal Convention

Things are never dull in our world. This time around we’re exploring the recent fire at Westport, looking into a fiery fine art insurance argument, diving deep into what Gen Z thinks about insurance, and pinning down what the Montreal Convention means to you. Here’s the news.

A BLAZE AT WESTPORT – 14 CONTAINERS FRAZZLED

Fourteen forty foot shipping containers caught fire in Westport on June 8, sending smoke into the sky above Pulau Indah, Klang. Thankfully nobody was hurt or killed. So what happened?

The containers included goods like unbleached craft paper, iron, minerals, sawn pine, scaffolding equipment, aluminium alloys and washing machines. The Selangor Fire and Rescue Department initially isolated the fires in several of the containers and put them out, completing the job by extinguishing the remaining eight containers in an isolated situation with the help of equipment from Petaling Jaya Fire and Rescue Station. Investigations revealed some of the containers caught fire from the inside, but the cause remains a mystery.

It’s another timely reminder: because you can’t underestimate the risk of accidents happening out of the blue, insurance makes all the difference to your finances.

ART COLLECTOR RON PERELMAN BATTLES US INSURERS

A case between the US art collector Ron Perelman and a group of insurers is going to court in New York State, involving insurers Lloyd’s of London and AIG. The collector is angry about their refusal to pay a 2020 claim for five paintings damaged in a 2018 fire.

Because the insurers say they can’t see any ‘detectable’ fire damage, the most important matter is whether the art was actually damaged in the fire or not. Perelman’s representatives say there was in fact damage simply because the paintings were in a fire. But an expert from Scientific Analysis of Fine Art, who was hired to scientifically analyse them, can’t prove exactly what the damage is. All she can say is that the fire would have shortened the paintings’ ‘lifetime trajectory’.

The defendants say Perelman was trying to sell the art before the fire then lied about it, making his policy void. At the same time Perelman’s lawyers say the insurers showed bad faith during the investigation, delayed it too long, and decided beforehand they weren’t going to pay. The fact that Perelman waited two years before filing his claim complicates things even more.

Insurers would usually pay for the damaged paintings to be repaired. Perelman’s policy had an extra clause saying he can hand over a damaged painting to the insurance company in exchange for the full insurance evaluation price, which is often 4-5 times more than it’s worth. It’ll be interesting to see who wins, and why.

GEN Z AND INSURANCE

These days your generation makes a big difference to your outlook, attitude and expectations. Gen Z, born from 1997 onwards, leads the way with a dramatically different outlook on life to previous generations, and it is affecting the way they feel about insurance.

Their own belief systems and values come first, and they don’t like being told what to do. It looks like cookie cutter one-size-fits-all approaches puts Gen Z off. Thanks to the internet, Gen Z are more skilled at handling their own risks than other generations. They’re fluent in the internet and confident talking about mental health, which means insurers could benefit from taking mental health as well as physical health into account when underwriting.

Gen Z is into the gig economy too, which opens up specialty insurance for home-workers, remote workers and part-timers, and it’s also an unusually loyal generation when treated right. All this means insurers will need to pin down generation-specific risks then design products to fit. They’ll be analysing Big Data, harnessing fintech to segment people, personalising products, and using social media to engage with their Gen Z audience.

HOW TO PROTECT YOUR LUGGAGE ON INTERNATIONAL FLIGHTS

The Montreal Convention treaty affects nearly every developed nation, with strict rules around how airlines must treat claims for delayed, lost and damaged luggage. It applies when you travel between two countries, but not for domestic flights and not for countries that haven’t signed the Convention itself or the Warsaw Convention.

When you’re covered the airline is responsible for your luggage from the second you check it in to the time you collect it. You’re covered for a maximum amount of 1,288 SDR or Special Drawing Rights, basically a kind of universal currency. The max you can claim is 1,288 SDR, worth around $1700 USD. Sometimes you can pay an ‘excess value’ charge to increase your limit. Or you can simply buy extra travel insurance to cover luggage with a high value.

You’re covered for baggage delay unless the airline can prove it did everything possible to prevent the loss or damage, and a simple one hour wait counts as a delay. Luggage is ‘lost’ when it still hasn’t turned up 21 days after the due date. And airlines are also responsible for damage or destruction.

If you’re travelling internationally, make sure you’re aware of what you can and can’t claim under the Montreal Convention. It could save you a fortune!

HOW CAN WE HELP YOU TODAY?

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