An earthquake similar to the one in 1977 would generate some EUR 6 billion worth of damages in Romania, according to the local insurers’ association UNSAR.

Only a third of the 8.8 million homes in Romania are insured against earthquake damage, most of them for a limited amount of EUR 20,000, reports local Agerpres. Thus, the local insurance companies would cover only a small part of the potential damages.

There are currently 1.7 million compulsory home insurance policies and 1.2 million optional home insurance policies.

By comparison, almost 40% of Romania’s homes had earthquake insurance in 2009. The number of compulsory home insurance policies increased from below 400,000 to almost 1.7 million now. The number of optional home insurance policies, however, dropped significantly.

The bankruptcy of two of the major local insurers could be an explanation for the lower number of optional insurance policies. Astra Asigurari had a significant portfolio of optional home insurance policies that disappeared when the company went bankrupt.

The market was also strongly affected by a law from 2016, which provided that optional policies couldn’t be sold anymore to people who didn’t have a compulsory policy.

40 years after the great earthquake of 1977, Bucharest is not prepared to withstand a similar event

editor@romania-insider.com

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