A homeowner pays on average EUR60-80 per year for a voluntary home insurance, which is lower by EUR30-50 than a mandatory car insurance, considering that a home is 5-10 times more expensive than a car.
Consultants of insurance broker Marsh said home insurance tariffs are declining due to the fierce competition on the market, but prices usually fall by 2% up to 5%. They added that prices are falling although Romania is highly exposed to catastrophic risks, especially earthquakes.
While home insurance tariffs remained unchanged or even decreased in some cases, tariffs on the mandatory car insurance saw the biggest corrections, as prices rose even by up to one third.
The damage rate reaches nearly 20% in the case of home insurance policies and nearly 80% in the case of mandatory car insurance. However, if purchase and administration costs are also added, then, insurers are unable to cover their total expenses generated by mandatory car insurance, registering loss from insurance underwriting operations.
Although home insurance is cheaper than car insurance, only half of over 8 million homes in Romania are insured.
Home insurance is a profitable niche for companies as long as Romania does not face a catastrophe, according to ZF.