Consumers have found an ally in a lawmaker and an insurance executive in their quest for coverage against losses brought about by “Acts Of God” (AOG) such as flood and earthquake.

Senate minority leader Aquilino Pimentel Jr. slammed the deceptive policy of several insurance companies not to indemnify owners of motor vehicles destroyed by the typhoons Ondoy and Pepeng.

Citing the AOG clause to avoid payment of claims does not make business sense, Pimentel said, as he endorsed a proposal to include the flood damage in the compulsory coverage of an insurance policy involving cars.

Insurance executive Ernesto “Judes” Echauz shared Pimentel’s view, saying that those who refuse the AOG policy will be pricing themselves out of the market.

Echauz, chairman and chief executive officer of Standard Insurance, said local surety companies should carry the AOG for the good of their clients who were affected by calamities. Some members of Philippine Insurance and Reinsurers Association earlier claimed that making the AOG compulsory will reportedly “destroy the industry.”

Association members claimed the industry might collapse if it were made to pay all AOG claims at once in the event of a calamity such as a volcanic eruption or massive flooding. Echauz said the position will eventually backfire on the insurance industry.

The property owner will have unrepairable vehicle and eventually default on the auto loan, leaving the bank holding the empty bag, he explained.

He said the premium with the AOG may be higher “but we saw to it that it is reasonable and still affordable by the clients.” He explained that “by the large number of policyholders, dispersal of the risk nationwide and reinsurance, actuarially we are able to achieve this.”