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Romanian Homeowners Have 6 Months To Get Mandatory Home Insurance

Romanian homeowners have six months to insure their homes, as the country’s law on mandatory home insurance has entered force.
Romanian Homeowners Have 6 Months To Get Mandatory Home Insurance
15 iul. 2010, 12:37, English

The country’s Insurance Pool Against Disasters, or PAID, estimates to conclude about one million mandatory home insurance contracts over the next six months.

„It would be good if we exceeded 10% (of the total number of homes in Romania) in the next six months. That means we would have one million insured by January,” PAID general manager Marius Bulugea said Thursday.

PAID started issuing mandatory home insurance policies Thursday, and the first such policy was concluded by Interior Ministry state secretary Mihai Capra.

The law regarding mandatory home insurance, adopted in November 2008, obliges homeowners to get insurance policies and pay premiums ranging from EUR10 to EUR20, insuring homes for EUR10,000 to EUR20,000.

Under the law, mandatory home insurance range from EUR10 to EUR20. The insured value will not exceed EUR20,000, and the minimum level will be set at EUR10,000. Failure to insure homes will be fined 100 to 500 lei (EUR1=RON4.2596).

Mandatory home insurance policies will be issued by PAID, a joint stock insurance-reinsurance company that will manage the risk fund meant for paying the damages in case of natural disasters.

In September 2009, 13 insurers signed the documents establishing PAID and their contribution to the PAID’s share capital was of EUR4.545 million.

The mandatory home insurance covers risks such as earthquake, floods and landslides.