In the Philippines, the contract of motor vehicle insurance is governed primarily by the Insurance Code (Republic Act No. 10607). When an insured party suffers a loss, the insurance company has a legal and contractual obligation to settle claims promptly. However, "repair delays"—often blamed on parts availability, adjuster evaluations, or accredited shop backlogs—are a frequent point of contention.
Below is a comprehensive guide on the legal frameworks, rights of the insured, and the procedural steps for filing a complaint against dilatory insurance providers.
1. Legal Basis for Timely Settlement
The Insurance Code is explicit regarding the timeframe for claim processing. Under Section 248, the law mandates:
- For Non-Life Insurance (Motor Vehicle): The proceeds must be paid within thirty (30) days after proof of loss is received by the insurer and adjudication of the claim has been made.
- If Adjudication is Pending: If the claim is not settled within 30 days, it must be paid within ninety (90) days from the date of filing of the claim, provided that the refusal or failure to pay is not based on the ground that the claim is fraudulent.
Unreasonable Delay (Section 250): If an insurer unreasonably denies or pricks the settlement of a claim, they may be held liable for attorney's fees, costs of the suit, and interest on the claim at double the ceiling prescribed by the Monetary Board.
2. Common Causes of Action
A complaint typically arises from one of the following "unfair claim settlement practices":
- Lack of Communication: Failure to acknowledge or act reasonably promptly upon communications with respect to claims.
- Bad Faith Delays: Compelling the insured to institute litigation to recover amounts due by offering substantially less than the amounts ultimately recovered.
- The "Parts Availability" Defense: While insurance companies often cite global supply chain issues for delayed repairs, the law generally views the contract as between the insurer and the insured. The insurer’s failure to manage its accredited shops effectively does not necessarily absolve them of the statutory timelines for "settling" the claim (which includes the completion of repairs).
3. The Administrative Process: The Insurance Commission (IC)
The Insurance Commission is the primary regulatory body in the Philippines with quasi-judicial powers to handle complaints against insurance companies.
Phase I: Informal Complaint (Mediation)
Before a full-blown legal case, the IC encourages mediation through its Public Assistance and Mediation Division (PAMD).
- Letter of Complaint: Write a formal letter addressed to the Insurance Commissioner.
- Required Details: Include your policy number, claim number, description of the vehicle, the date the claim was filed, and a chronological summary of the delay.
- The Conference: The IC will summon the insurance company representative to a mediation conference to find an amicable settlement (e.g., expediting the repair or offering a cash settlement in lieu of repair).
Phase II: Formal Adjudication
If mediation fails, the insured may file a Formal Complaint with the Adjudication Service of the IC.
- Jurisdiction: The IC has the power to adjudicate claims where the amount of any single claim does not exceed PHP 5,000,000.00 (excluding interest and attorney's fees).
- Process: This functions like a court trial. You will need to submit position papers, affidavits, and evidence.
4. Step-by-Step Action Plan for the Insured
| Step | Action | Description |
|---|---|---|
| 1 | Demand Letter | Send a formal "Final Demand for Repair/Settlement" to the insurance company via registered mail. This establishes a clear "default" period. |
| 2 | Document Everything | Save all emails, SMS, and "Job Orders" from the repair shop. Note the dates when the vehicle was turned over and when the "Authority to Repair" (ATR) was issued. |
| 3 | Request a Timeline | Demand a written commitment from the insurer or the accredited shop regarding the specific completion date. |
| 4 | File with PAMD | If the demand is ignored, submit the complaint to the Insurance Commission (Main Office in Manila, or District Offices in Cebu/Davao). |
5. Alternative Remedies: Small Claims Court
If the dispute involves a refund or a specific monetary claim resulting from the delay (and the amount is PHP 1,000,000.00 or less), the insured may opt to file a case in the Small Claims Court (Metropolitan or Municipal Trial Courts).
- Note: This is a faster, inexpensive process where lawyers are not allowed to represent parties during the hearing.
6. Key Evidence to Prepare
To win a case for delayed repairs, the following evidence is critical:
- The Insurance Policy: Specifically the "Conditions" section regarding claims.
- Proof of Loss: The incident report, photos of the damage, and the initial claim form.
- Correspondence: Records of the insurer’s promises or excuses regarding the delay.
- Technical Reports: If the delay is causing further deterioration of the vehicle (e.g., battery death, upholstery damage), document these secondary losses as well.
Legal Note: Under the principle of Contract of Adhesion, any ambiguity in an insurance policy is interpreted liberally in favor of the insured and strictly against the insurer. If the policy is silent on how long a repair should take, the "reasonable time" standard—supported by the Insurance Code’s 90-day maximum—is typically applied.