The policy was signed with Credit Europe Asigurari, one of PAID’s shareholders, on December 28 and took effect on January 1, 2011. The building had been constructed in 1995 and had every necessary authorization. The owner will not be allowed to rebuild it in the same area, which is exposed to the risk of floods.
“The flood risk has become a certainty in Romania in recent years. We are no longer wondering whether floods will happen, but when they will happen. I still believe that the main obstacle in expanding PAID’s range is the equating of the insurance policy with the penalties provided by law. The purpose of Law 260/2008 is protecting buildings from the three types of natural disaster and not the penalties faced by uninsured homeowners,” said PAID general manager Marius Bulugea.
There are 5,979 homes in Avrig, but PAD policies have been signed for only 201.
On August 1, PAID’s portfolio included 780,268 mandatory policies. Between July 15, 2010 and August 1, 2011, PAID authorized 55 case files and disbursed compensation for 23 of them. The total value of damage claims paid is over 170,000 lei (EUR40,000).
Homeowners are required to take out insurance against earthquakes, landslides and floods. The yearly premium for the policy sold by PAID is EUR10-20, depending on the type of building, and covers damages between EUR10,000 and EUR20,000.
As defined by the law, a type A home’s frame is reinforced concrete, metal or wood and its walls are stone, burnt brick or other materials resulting from thermal/chemical treatment, while a type B home has walls of unburnt brick or other materials that have not undergone such treatment.
PAID (the Pool of Insurance Against natural Disasters) 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.
(EUR1=RON4.2356)