Let’s compare the corporation-oriented Korean insurance claim to American insurance.
A fire broke out in a building with 400,000,000 Korean Won (approx. $400,000)insurance coverage. Police suspected arson and investigated the owner and the people around the area for 6 months but no one was found guilty.
The insurer asked for the compensation immediately after the incident. However, the insurance company argued that the investigation had to be completed in order for the insurer to receive payment
Based on an estimate by an architech, the insurer submitted a damage repair estimate for 370,000,000 Korean Won ($370,000). Insurance company simply told the insurer to wait. Four months later, the company filed a lawsuit against the insurer for attempting to over claim the damage, because the insurance company’s damage appraisal was only 108,000,000 Korean Won ($108,000).
The trial could take about 2 years and during that time, the insurer would have to pay for 70,000,000 Korean Won ($70,000) in rent and repair, all while the safety of the building is jeopardized. The insurer had no choice but to counter-sue.
In cases like this, American insurance companies will not bring a lawsuit against the insurer for the difference in the amount of compensation unless they are willing to pay a huge amount of punitive compensation if they lose.
While Korean law does not offer punitive compensation clause the U.S. law does. Even though the insurer’s compensation limit is set for 400,000,000 Korean Won ($400,000), the insurance company might have to pay unlimited punitive damages if the court finds that the insurance company abused its position. Also, the insurance company must pay the assessed compensation immediately even if there is a dispute over the amount between two parties. Consumers are well protected in the U.S and public adjusters can help you receive all the benefits you deserve in insurance claims.
Jung Park, PA
Excel Public Adjuster