San José, Costa Rica, since 1956

In defense of Costa Rican insurers

Sometimes, nasty people tell me that in Costa Rica insurance is a scam because “the insurance company never pays up.” Naturally this gets me riled, as the implication is that I am some sort of con artist or crook, selling something that is no good. Why the terrible reputation? Here are two illustrative anecdotes.

David Garrett

David Garrett

“My friend’s house was ruined in a landslide, and the insurance didn’t pay a bean!” It happened that I knew about this case: The house, which was on a steep mountainside, had never been insured, because the owner didn’t believe in insurance and was relying on the inbuilt strength of the house. Human nature being what it is, when the house slipped down the hill, so as not to look stupidly unprotected, the chap spread the word that (“Poor me!”) the insurance company hadn’t paid the claim.

Another naysayer’s tale: “My neighbor’s house was damaged by a short circuit. He was insured, but the electrician who repaired the damage said fire damage caused by electrical problems is not covered by insurance. So insurance in Costa Rica is a joke!” I couldn’t believe my ears. Who said? The electrician? Did the neighbor consult his insurance broker, or talk to the insurance company directly? “No, my neighbor doesn’t speak Spanish, and his insurance agent doesn’t speak English, so he dropped the matter.” Some people’s logic defies description. If the neighbor believed that insurance companies in Costa Rica don’t pay claims, why on earth did he get a policy? And why was he dealing with a broker with whom he could not communicate?

To set the record straight, our insurance companies do indeed pay claims. The biggest insurer is the National Insurance Institute (INS), owned by the government, which guarantees its solvency. Why shouldn’t it pay claims? It is not like private companies, where there is someone jealously watching the bottom line. INS pays out, quite generously in fact. So what’s happening? Why is insurance reputedly so dismal among foreigners?

There is a lot of paperwork. Many government institutions are staffed by people who have reached the limits of their capabilities, and to avoid making mistakes that would jeopardize their continued employment, they throw up bureaucratic stumbling blocks to try to slough away work and responsibility for decision making. If a client fulfills the paperwork requirements, his “trámite” process will continue. Sometimes I have had foreign claimants say their insurance company back home doesn’t ask for all this paperwork, so they aren’t going to provide it to their Costa Rican insurer. As you can imagine, the claims of people with such attitudes don’t get paid, and then they start yapping.

So the morals of this story are:

1. Buy insurance from a broker with whom you can communicate.

2. If anything goes wrong, call your broker; he is the intermediary between you and the tedium of the insurance company. He must stand up for your rights and make sure your claim is paid within the terms of the insurance contract.

3. There is always considerable paperwork with claims. Be patient. Provide the required documents, and you will eventually get paid.

4. If all goes wrong, lodge a complaint with the very efficient Insurance Superintendency, SUGESE, which is there to make sure consumers’ rights are upheld.

The opinions and viewpoints expressed are those of the writer, whose purpose is to give the reader a better understanding of insurance in Costa Rica. For more information, contact David Garrett at 2233-9520 or

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