PROVIDED BY LAW BY THE I.N.S.
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Garrett & Associates |
HERE ARE SOME EXAMPLES OF INSURANCES PROVIDED BY I.N.S. (Check with your agent)
"HOGAR SEGURO 2000" HOME FIRE POLICY
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WHAT CAN BE INSURED?
Homes and/or their contents: policy can only be used for single dwellings. No
commercial buildings. No apartments.
AGAINST WHAT PERILS? There are four coverages: "A" covers fire
and lightning; "B" covers damage caused by mutiny, strikes, vandalism, hurricane,
cyclone, explosion, smoke, falling objects, vehicles and resulting fire; "C"
pays for damage caused by floods and landslides; "D" covers natural disasters :
'quakes, tremors, volcanoes, tsunamis, etc. C and are D sold jointly. You can
take A coverage by itself, A+B, A+CD, or complete coverage A+B+CD.
WHAT IF THE HOUSE IS RENTED? The tenant covers his household
effects. The landlord insures the house itself.
THE COST? Primary coverage A costs 0.0672% of the value. A+B
costs 0.0896%. A+CD costs 0.2212%. Complete coverage A+B+CD costs 0.2436%.
Example: Premium for A+B+CD on a $100,000 home would cost $243.60 per year. To
the premium, add 13% Sales Tax.
HOW IS THE VALUE ESTABLISHED? You base it on DEPRECIATED NEW
VALUE, i.e. estimated cost of rebuilding, less 2% depreciation for every year
that the house is old, for wooden buildings, 1% for masonry buildings. Note :
INS automatically increases insured amounts every year at policy renewal time
following an index of increases in construction costs.
WHAT ABOUT CONTENTS ? Estimate the value based on current
prices in Costa Rica. INS does not ask for a comprehensive list, but you should
itemize single articles worth US$750 or more.
IS THERE A DEDUCTIBLE? On B coverage the deductible is C.20,000
per claim. For hurricane damage it is 20%. For CD coverages the deductible is 1%
of the total insured amount with a minimum of C.50,000. Note: INS frequently
modifies deductibles.
EXCLUSIONS. Flooding or water damage because of defective
guttering, drains, roof, plumbing, etc.; damage to the electrical system or
contents of the house due to lightning which did not cause a fire; damage
resulting from war, invasion, revolt, etc.; minor damage such as cigarette burns
on carpets, etc.
MAIN PROVISIONS. Not leaving the house unoccupied and unguarded
for 30 days or more. Not keeping combustible materials in house. Claims should
be presented within 5 days of damage occurring
I.N.S. AUTOMOBILE INSURANCE
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COVERAGES
Following are the coverages that are available. Within certain rules, you can
select which ones you want: you pay for what you get. Most widely sought
coverages are ACDF. For easy estimation, ACDF costs (including Sales Tax) about
5% of the market value of the vehicle, for 6 months insurance. (Auto insurance
cycles every 3 or 6 months: you cannot get coverage for a different period.)
A. PERSONAL LIABILITY Covers liability established by the
Courts as a result of death or injury caused by an accident for which the driver
of your vehicle was guilty. The benefits are paid once the Obligatory Insurance
is used up. Does not cover injury or death of family members or employees of the
policy-holder or driver.
C. PROPERTY DAMAGE Covers damage to property (car, house, etc.)
belonging to other people, if the accident was the fault of the driver of the
insured vehicle. Excludes items being transported by the insured vehicle.
D. COLLISION Pays for the repair of the insured vehicle in case
of collision or overturning: (a) if the accident was the fault of your driver,
or (b) if the accident was not the fault of your driver but the other vehicle
has no insurance and the owner cannot pay.
E. FIRE Covers damage to your vehicle caused by fire due either
to internal factors such as short circuit, or to external factors such as
lightning, or if the place where the vehicle is parked burns.
F. THEFT Covers total theft of the vehicle, or loss derived
from the total theft. If it is recovered, policy pays for damage and/or missing
parts. If not recovered within a month, the insured amount is paid or the
vehicle is replaced. Does not cover non-factory accessories or personal items
stolen from the vehicle.
H. ADDITIONAL RISKS Covers damage resulting from floods, wind,
hurricanes, earthquakes, landslides, vandalism, explosions, collision with birds,
falling objects, accidents within parking lots or private property, etc.
OTHER THINGS YOU SHOULD KNOW
LICENSE. Anyone with a valid license can drive. This means a
Costa Rican license, or a foreign or international license if the driver last
entered the country less than 90 days ago and is 18 or over.
OBLIGATORY. Obligatory insurance comes with vehicle
registration and is paid in December along with the Road Tax. The coverage is
minimal – please consider it another tax. The policy summarized here is optional,
so nobody has authority to request to see your policy. But carry your policy
number - it helps to have it handy if you have an accident.
INSPECTIONS. New insurance or increases require signatures and
an inspection of the car, usually to include photographing. Inspections are also
required on policy anniversary when the vehicle is 10 years old, and every year
as of when it’s 15.
CHANGES OF OWNERSHIP. Insurance should be in the name of the
legal owner of the car. If you sell the vehicle you can put your new car on the
old policy. Alternatively, you can cancel the policy and a partial refund will
be processed by INS after several weeks.
ABROAD. For cars with Costa Rican registration, coverage
extends to all Central America and Panama.
DEDUCTIBLES. All coverages except "A" have standard deductibles.
"A" has no deductible. Double deductible if the driver is under 22, in cases of
vandalism, birds, or accidents in private property.
RENEWAL. Auto insurance is normally for six months, after which
you have a grace period of 10 working days to pay for renewal. After that, you
would have to apply for new insurance or reinstatement. If you have an accident
in the grace period, renew before claiming.
ALCOHOL. Policy will not pay for accidents to vehicles being
driven by persons under the influence of alcohol or drugs, even if the condition
did not cause the accident. An alcohol count of 50mg or more in 100cc of blood
will invalidate insurance coverage, except for liability coverages A and C.
EXCLUSIONS. Vehicles involved in any type of race, rally, riot,
combat, or used for any illegal purpose. Vehicles being towed, or on certain
ferries. Criminal liability incurred by the insured party.
ROADSIDE ASSISTANCE coverage is included free for vehicles less
than 15 years old which have coverage "D". Call 800 800 7000 (toll free) if you
have a flat, a dead battery, are out of gas, or need a tow truck.
I.N.S. HOME THEFT INSURANCE
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COVERAGE Policy
covers contents of the home appearing on a list, which is prepared by the
applicant. List EVERYTHING within the house - not just high-risk items. Items in
the garden, patios, terraces, etc. can be included, but there will be a
surcharge.
NON-INSURABLE ITEMS. Jewelry, gems, precious metals, furs,
securities, cash, motor vehicles, animals, collectors' items, documents,
priceless artworks. INS has lately been refusing to cover firearms, video
cameras, and laptop computers.
REQUIREMENTS FOR THE LIST. Preferably made out in Spanish, with
MARKET VALUE in Colones for each item. Market value means your best estimate of
how much it would cost to replace each item with one of a similar age and
condition, purchased in Costa Rica. INS requires full description of electrical
items, cameras, mowers, bikes, etc.: makes, models, and serial numbers. Save
trouble by using generics, such as "ladies clothing, C.95,000" or "toys,
C.75,000" or "kitchenware, C.45,000" or "65 cassettes with values ranging
between C.500 and C.2,500, total C.35,000". As INS has the option to pay the
insured value for each stolen item or to replace it with one of similar age and
condition, take care not to overstate the values on your list - but you should
revise them periodically to compensate for inflation, add new items, and delete
ones that have been disposed of.
CLAIMS. INS pays in clear cases of burglary: there must be
evidence of a break in or intimidation. A Police report is mandatory, with copy
for INS. Claims for "lost" items are disregarded. Paperwork is considerable and
settlements usually take about 60 days. Deductible is 10% of value of stolen
items, minimum C.50,000 per break in.
DAMAGE FROM BREAKING AND ENTERING. If the home belongs to you,
policy pays for damage done to the house by a thief, based on tradesmen's bills
for repairs. This insurance does not cover vandalism.
PREMIUMS. Rate depends on the security and location of the home
: there are discounts for good security, and surcharges for remote locations.
Average rate is 1.3% per year, based on the total of the inventory list. Rates
for secure homes in secure areas can go as low as 0.75%. Less protected homes in
remote areas can go up to 1.5%. Add 13% Sales Tax to the premium.
LEAD TIME. Coverage usually begins 2-3 weeks after INS has
received your signed application and list, and the home has been inspected by
your agent.
MAIN POLICY PROVISIONS. If the home is to be unoccupied for
more than 48 hours, it must be placed in the care of a guard and you must notify
INS in writing one week in advance. If there is a break-in, you should advise
INS or your Agent within office hours, as soon as possible
I.N.S. LIABILITY INSURANCE
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WHY. The purpose
of a Liability policy is to protect you against lawsuits stemming from accidents
occurring in the insured premises or during an insured activity. IMPORTANT: INS
will not pay a Liability claim on your say-so - there must be a Court ruling and
award.
WHAT DOES THE POLICY PAY FOR. Amounts determined by the Law
Courts of Costa Rica to be paid to third parties (other people) in compensation
for accidents causing personal injury, death, or property damage or loss. Policy
can also cover legal costs if the Court rules that they should be paid by the
insured.
WHO CAN GET INSURANCE. Anyone: homeowners, tour operators,
hotels, restaurants, shops, food manufacturers, etc. Policy is based on a
certain activity or premises, and if it foreseen that an accident may occur to a
guest, consumer or client, a Liability policy may be advisable.
WHAT ARE THE COVERAGES. Two coverages are available :
Coverage A - Injury, loss of life and limb.
Coverage B - Damage or loss of property.
You can have separate limits for coverage A and Coverage B, but the usual is a
Combined Limit, where INS will pay up to the insured limit, per accident,
regardless of the breakdown of the award.
HOW MUCH INSURANCE. Try to visualize a worst-case scenario of
what could happen in an accident: that is the recommended limit. Take into
account, however, that in Costa Rica awards have not got out of hand, as in
other countries, in regard to punitive damages, pain and suffering, deep pockets,
etc.
HOW MUCH DOES A POLICY COST. The premium is a percentage of the
insured amount, usually around 1% per year. The exact rate is fixed by INS on a
case basis, per the perceived risk as described on the policy application, which
has to be filled out by the Agent when visiting the premises. It is usual, also,
for INS to send an inspector, before establishing the rate, to interview the
applicant and corroborate the information on the application.
DOMESTIC WORKERS COMPENSATION:
BACKGROUND.
Costa Rican labour law says that employers must provide two types of protection
for their employees: (1) Social Security, which covers sickness, pregnancy, and
non work-related accidents; (2) Workers’ Compensation ("Riesgos del Trabajo" or
RT), which covers work-related accidents. If an employer fails to protect his
employees, he is responsible for any events which otherwise would have been
covered.
Social Security must be contracted with Caja Costarricense del Seguro Social
("La Caja"). RT is provided by INS.
For domestic workers, INS offers a special, cheaper version of RT, with less red
tape: "Riesgos del Trabajo – Hogar", or RTH. The RTH policy can cover foreign
workers, regardless or whether they are legal immigrants.
TWO OPTIONS. The standard RTH policy has two options. If your
domestic arrangements do not conform to either, you should buy a normal RT
policy directly from the most conveniently located INS office.
Option 1. Covers one full-time domestic employee (maid, servant,
cook, housekeeper, etc. – but not a guard or driver) plus one other person (gardener,
odd-job person, etc.) for up to five days per month. Yearly cost, C.9,950
Option 2. Covers two full-time domestic employees, plus one
other person for up to five days per month. Yearly cost: C.17,900
APPLICATIONS. Your insurance Agent must fill out and you, the
employer, must sign a form with your name and I.D. number. Form must also
include the name(s) and cédula or I.D. number(s) of the full-time employee(s).
The cover becomes effective once the premium is paid.
REPORTING. If your domestic staff changes during the insured
year, you must notify INS. Also, every month you must report your payroll on a
special form. It is usually convenient to send these reports to INS directly by
fax.
ACCIDENTS. A form "Orden de Atención Médica" must be completed
and signed by the employer. If the accident is serious, call 911. If not serious,
send the employee (with the form) to the INS clinic near Hospital Mexico in San
José.
I.N.S. MEDICAL INSURANCE POLICY
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WHO CAN BE INSURED?
Anyone up to age 100, regardless of legal status in Costa Rica. Applicants over
70 must undergo an examination by an INS doctor. It takes INS about 3 weeks to
study applications: you don´t pay until accepted.
WHAT DOES THE POLICY PAY FOR? Medical expenses due to sickness,
accident. or childbirth. Ambulatory care up to 10% of the insured amount.
Hospitalization including surgery, pre and post operative care, private room,
food, support systems, intensive care, rehabilitation, ambulances, home care,
therapy, medication, etc. In case of death, 50% of insured amount is paid to
named beneficiary.
WHAT DOES IT EXCLUDE? Pre-existing conditions. Non-prescribed
expenses. AIDS. VD. Medical expenses as a result of cataclysmic events, fighting
except in self defense, speed and water sports, martial arts and other dangerous
activities. Accidents when under the influence of alcohol or drugs. Mental or
nervous disorders. Checkups. Allergies. Stress. Plastic surgery. Only accident-related
eyeglasses, dentists' bills or reconstructive surgery are paid. Some ailments (e.g.
ENT, women's reproductive organs, breasts, asthma, hernias, pregnancy, prostates)
have a 12 month moratorium during which claims are not allowed.
HOW MUCH DOES IT COST? You can choose between 3 levels of
insurance. Premiums depend on the level, and on age and sex of applicants. Some
averages of yearly premiums:
| Level -> | - | C.4 million | C.6 million | C.8 million |
| Men age | 19 - 34 | 53,000 | 63,000 | 69,000 |
| 35 - 49 | 81,000 | 96,000 | 107,000 | |
| 50 - 59 | 125,000 | 152,000 | 174,000 | |
| 60 - 75 | 243,000 | 310,000 | 366,000 | |
| Ladies | 19 - 54 | 197,000 | 224,000 | 244,000 |
| 55 - 64 | 260,000 | 294,000 | 316,000 | |
| 65 - 75 | 380,000 | 436,000 | 477,000 | |
| Minors up to | 18 | 63,000 | 75,000 | 84,000 |
Group policies for companies to
cover employees cost about 75% of individual rates. For associations or clubs,
10% off. Note: cost of renewal may increase if there is a high claim/premium
ratio.
HOW DOES THE POLICY WORK? You are given a list of about 325
affiliated providers, including some of the best regarded private hospitals and
clinics in Costa Rica; doctors, labs, pharmacies, etc. to whom you show a
special card and pay only the deductible. If you go to non-affiliated providers,
you pay the bills and, when healthy once again, submit to INS a claim form
signed by you and your main doctor, attaching original receipts and
corresponding prescriptions: INS will process the claim and pay after 3-6 weeks.
Charges of non-affiliated doctors are not regulated, and the policy will only
reimburse up to the amount INS allows for affiliated doctors.
DEDUCTIBLES? Usually 25% for medication, tests, hospital care,
therapy, treatments, doctors' visits, specialists' fees, etc. and 30% for
ultrasound. For surgery, policy pays 100% up to the regulated maximum.
Deductible for claims involving treatment outside of Costa Rica, 40%
WHERE DOES THE POLICY APPLY? Although the policy purports to
give worldwide coverage, from a practical standpoint it is of limited value
outside Costa Rica.
BUSINESS INSURANCE: FIRE AND RELATED PERILS
APPLICATIONS.
The Fire policy can cover commercial and industrial buildings, their contents,
or both. The contents generally include fixed assets, such as machinery,
furniture, leasehold improvements, computer equipment, and current assets such
as inventories of raw and packaging materials, production in process, and
finished goods.
BUILDINGS. Insured at the estimated cost of rebuilding, less
depreciation (1% P.A. for noncombustible buildings, 2% for combustible).
REMOVABLE FIXED ASSETS – Machinery, furniture, equipment, etc.
There are two options as to how these can be insured on the Fire policy:
At book value; i.e., the general ledger balance of each asset account, less any
depreciation. In the event of a loss, the lower of the Actual Cash Value or the
net Book Value (purchase price less depreciation) will be the adjusted value. If
at the time of a claim the total net Book Value of the general account as per
the ledger is found to be greater than the insured value, coinsurance will be
applied as a global percentage of the shortfall on all assets claimed for. This
method of valuation has as its main advantage the possibility of insuring
without drawing up a list, but the combined effect of devaluation and the
application of depreciation can very rapidly prove this valuation method as
unsuitable.
At value per list of assets. A list of assets is drawn up, in which a
description of each item, or group of items is valued, at Actual Cash Value (or
replacement value, if that is the case). In the event of a claim, losses are
adjusted based on the lesser between the insured value and the Actual Cash Value
at the time of the claim. The insured must be able to prove ownership of the
claimed asset.
INVENTORIES. These are insured at their book value, at landed
or manufactured cost. It is possible to negotiate with INS for a policy on a
reporting basis, where a provisional premium is paid in advance based on
estimated inventory peaks, and then it is adjusted at the policy anniversary
date following monthly inventory reports submitted to INS by the insured.
RENTERS. Unless specified in the rental contract, renters need
not insure the buildings they occupy, but it behooves the renter to cover the
premises for fire, in case of a conflagration caused by the renter or his
employees.
LEASEHOLD IMPROVEMENTS. Insured at their actual cost per books.
A description of the exact nature of the improvements must be provided.
COVERAGES. This insurance is of the "Named Peril" type.
Coverage is for the specific events as defined in the clauses of the policy, and
subject to certain rules and limitations. The coverages available are in
addition to Coverage A, (Fire and Lightning), this coverage being mandatory if
other coverages are desired. Available are the following:
Fire and lightning. (basic coverage.)
"Comprehensive". Damage caused by civil insurrection, strikes, vandalism, wind,
hurricane, falling objects, explosion, and smoke.
Floods and landslides.
Earthquakes and tremors and resulting fire. Volcanic eruption and other natural
disasters
Explosions.
Loss of benefits. This part of the commercial Fire policy provides for lost
income to the owner of a property which is rendered unusable by an insured event.
Rain and spillage.
Business interruption. This insurance is an endorsement to the Fire policy, and
insures for the loss derived from an occurrence insured on that policy. The
coverage is generally determined based on the percentage of gross profits method
(American method). The process to obtain business interruption insurance is
complicated, and takes a several weeks to get coverage in position.
Window and glass damage.
PREMIUMS.
Computed as a percentage of the insured values. The rates depend on the nature
of the business, the perceived degree of hazard, the type of construction and
the condition of the building, and the location. Rates usually fall between 0.5%
and 2% p.a. for ABCD coverages. To the premium add 13% for Sales Tax.
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