Mortgage Loans and Earthquake Insurance:

In the case of BancoEstado customers, 99% of its portfolio has earthquake insurance, while 60% have household equipment insurance. The insurance is on the home value, and not on the debt balance.

In addition, unemployment insurance covers the payment of the dividend in a period between four and eight months. Note that insurance do not cover minor damage to 25 UF (520 thousand pesos approximately).

To apply for such insurance, from Chile you just have to call 600 660 1212 or go to any branch and provide the following information:

-          Name

-          Id number of customer who is the policyholder or claimant

-          Telephone number and address of customer who is policyholder or claimant

-          Address of the damaged property and description of damage.

 

This information has to be submitted before 30 May 2010.

 

Coverage

If the home of the policyholder is uninhabitable, i.e., if it meets the criteria described in www.bancoestado.cl and it has been certified by a liquidator, the insurance will also refund six months of rent up to a maximum 15 UF per month (315,000 pesos approximately), and the policyholder will have to submit a rental agreement or accommodation expense receipt.

If a customer completed his/her mortgage payments in September 2009 or afterwards, he/she is also covered by this insurance.

 

Amount insured and Beneficiaries

The fire and earthquake policy for the mortgage portfolio covers up to the amount insured for each home. This amount is determined as follows: 

 

• Loans with Mortgage Papers, equivalent to the initial amount of credit. 

• In mutual mortgage loans, the amount insured is the appraisal value of the property value for insurance purposes.

 

Both the Contracting Party and the Beneficiary of the Policy is the Bank, i.e., the indemnity related to each home is paid by the Insurance Company directly to BancoEstado.  However, the Bank, as the contracting party of the insurance policy, may resolve to transfer the compensation in full to the customer (for example, in the event of minor damages); agree to transfer the compensation in instalments depending on the progress of the repair work (for example, if damages are medium level that may affect the guarantee); or may repay the outstanding debt (giving the difference to the customer, if applicable).

 

Special Measures For The Regions Of Maule And Bío Bío

Aware of the difficulties affecting the people who live in the earthquake affected areas, BancoEstado executives made onsite visits to a number of locations and implemented a series of special measures applied in the regions of Maule and Bío Bío. These measures are summarised below:

 

- Customers with consumer loans and student loans

• Customers with current debts and up-to-date payments (at 26 February 2010), March and April instalment payments will be postponed. Customers who have a PAC agreement (automatic payment) as method of payment, the bank will charge a $0 peso instalment.
• Customers with current debt, but who are in default at 26 February 2010, will not undergo collection procedures during March and April.

 

- Credit Card Customers

• Customers who have minimum payment signed shall be charged $ 0 during March and April.
• Customers who have full payment of their credit card: the charge will be applied as normal.
• Customers with current debt past due on 26 February 2010, will not undergo collection procedures during March and April.

 

- Line of Credit

Customers who should renew in March or April  will have their line of credit renewed for a further 12 months, unless they have been rejected, in which case the line of credit will be reassessed in order to continue through to May.

Mortgage Loans

For current mortgagers with up-to-date payments at 26 February 2010, mortgage payments will be postponed for 6 months. This also includes renegotiated loans that are up-to-date.

 

Measures for other affected regions

For people who live in other regions and who were also affected, such as O’Higgins, Araucanía, Valparaíso and the Metropolitan Region, the bank also undertook actions aimed at minimising the impact. For these actions to be effective, earthquake victims have to go to their local branch where they will receive prompt service.

The same relief measures implemented in the regions of Maule and Bío Bío will be applied to these people. However, in the latter regions the measures are immediately effective, in the rest of the country they will have to go to their local BancoEstado branch.

 

Additional Measures

The bank also reported that for Microenterprises and Small Business, dialogue tables have been held with trade unions to analyse the situation and analyse insurance coverage for installations and equipment.

Finally, the bank reported that a specific case is that of adobe houses.  Since 1985 these houses have not had any insurance coverage. However, BancoEstado is studying formulas to extend loans so that the homeowners can repair this type of house.