The Pool of Insurance Against Natural Disasters (PAID), the company selling mandatory home insurance policies, had around 791,000 policies in its portfolio last week, down from a peak of almost 730,000 in early August.
“We do not know for sure how many of the expiring policies are replaced with voluntary home insurance policies,” said PAID general manager Marius Bulugea. “We are witnessing, however, a quite serious phenomenon, where people no longer seal policies after all the stir around the fines applied to those who do not insure their homes has faded away. We send the lists with the insured people whose policies expire several weeks ahead to member companies.”
Bulugea said the portfolio is shrinking as the rate at which expiring policies are renewed stands at around 20%. However, the new sales posted in the past two months topped those registered in the August-September 2010 period, Bulugea added.
However, the daily average of new sales in August and September dropped up to three times compared to June and the first half of July. Over the past two months less than 2,000 policies were issued per day, while in June and July 5,000-6,000 policies were sold.
Owners who are not insured risk a fine of between 100 lei (about EUR23) and RON500. City halls may fine homeowners who do not have a valid insurance policy (…) Nobody has been fined so far, though. “Formal payment notices were sent, though, meaning additional expenditures for local administrations,” said Bulugea.
The 790,000 mandatory insurance policies cover 9.5% of the total number of homes in Romania. Another over two million homes are insured through voluntary policies.
PAID is a joint stock insurance-reinsurance company that manages the risk fund meant for paying damages in case of natural disasters. Its 13 shareholders are: ABC Asigurari, Astra Asigurari, ARDAF, Carpatica Asig, Certasig, City Insurance, Credit Europe Asigurari, Euroins Romania, Generali, Grawe Romania, Groupama Romania, Platinum Asigurari and Uniqa Asigurari.
Allianz and Vienna Insurance Group are among the insurers which did not join the PAID shareholder structure, as they believed the company’s business model was unsustainable.
PAID officials say, though, that the insurer is solvent and holds the necessary cash to pay any claim.
(English version by Catalina Apostoiu)