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Greek FinMin considers imposing compulsory property insurance

Greek finance ministry considers to make property insurance against earthquake and floods obligatory. According to daily Kathimerini, the compulsory insurance of property against big natural disasters like earthquake and flood is being considered by the finance ministry as an attempt to forestall the possibility of a widespread economic damage from an unexpected event such as an earthquake or flood.

A special legislative committee has been already set up that  to investigate the issue.

The model under discussion refers to the creation of a fund managemed by insurance companies.

Basic level of insurance policy is being considered to be 100,000 euro. In such case, the insure cost would be 100-150 euro per year will be covered by the property owner.

Of course, owners will be able to insure their properties for higher amounts depending on the property value.

The insurance policy will be compulsory for every act that has to do with the property like sale, rent etc. Something similar to the Energy Certificate imposed 2 years ago. A certificate that costs 300-500 euro to property owners.

In general, the consideration is 1-1.5 euro per every 1,000 euro coverage.

In case the property is acquired via a mortgage, the insurance company pays firs the bank for the part of the loan that has not been repaid yet.

The logic of compulsory property insurance is based on the model of compulsory vehicle insurance.

The argument behind the property insurance is that the Greek state is unable to compensate victims when an unexpected event such as an earthquake occurs.

Properties with insurance policy against earthquake are no more than 15% across the country.

Odd enough – or not at all- one day before the Kathimerini report, a conference on earthquake risks revealed the estimated cost of an earthquake in Thessaloniki.

“200 dead, 20 billion euro material damages, should an earthquake of 6R hit Thessaloniki, the city with 900,000.” These risks estimations were done by a professor at Thessaloniki University.

Is it coincidence that also that PASOK leader Evangelos Venizelos is from Thessaloniki?

PS rumors that insurance policies will be compulsory against aliens abductions are not confirmed. We’re in grip of aliens anyway. Weird enough, they believe each Greek had a money printing machine at home.

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3 comments

  1. Every insurance company has “act of God” in it’s bag of tricks to avoid paying out premiums. It doesn’t stop them from collecting the premium thoug… I’m fairly certain tha an Earthquake would, in insurance terminology, qualify first time around as an “Act of God”. The b eauty with this little trick is that they don’t even have to prove it…

  2. The logic of compulsory property insurance is based on the model of compulsory vehicle insurance.

    No it’s not. For my car I can choose between all-risk or limited coverage. I don’t have the choice towards coverage toward third parties though, that part is compulsory.
    This scheme is based on several lies. One of them is that in almost all European countries home insurance is compulsory. Would be nice to know how it is in other countries. But in over-regulated Holland home insurance is just compulsory if you still have a mortgage. And that’s it. When it is MY house it is MY decision what the risks are I want to be insured for and which I think I can cover or want to cover.
    But say we will do this. We all pay 150, and most of us more, as premium into this new created Fund, this private legal entity, which will be overseen by the state. How big are the odds that this Fund will be suddenly and totally expected empty when we need it to pay out? Close to 90% change, I would say, because be assured those funds will go the same way as the pensions and other funds we all have been paying into over the years.
    So, it’s just another thieving scheme who’s main purpose is to still maintain the status quo and avoid meaningful structural changes.

  3. €100 to €150 for house and earthquake insurance? In your dreams!
    Nobody I know has earthquake cover on their buildings insurance, the cost is prohibitive.