First mandatory house insurance policies to be issued in July

Romanian home owners will need to insure their houses, according to the local legislation, and the first mandatory home insurance policies will be issued in July or in August, the latest, according to the head of the Disaster Insurance Pool (PAID), Marius Bulugea. He estimates around 20 to 30 percent of the houses will be insured in the first year. PAID, which will issue the mandatory home insurance policies, was set up in 2009, when 13 insurance companies have partnered in forming the insurance pool. They all contributed with a total of EUR 4.5 million to PAID's social capital. Astra, Platinum România şi Groupama Asigurări. ABC Asigurări, Ardaf, Carpatica Asig, Certasig, City Insurance, Credit Europe Asigurări, Euroins have a 15 percent participation each in PAID, while Generali and Grawe, a 5.5 percent participation each. PAID has also started talks with re-insurance brokers Willis, AON, Guy Carpenter, Stellar Re and RFIB. The home mandatory insurance law was enacted in November 2008. It states home owners need to buy insurances, with prices varying between EUR 10 and EUR 20, depending on the type of house. The insured value cannot exceed EUR 20,000, with a minimum value of EUR 10,000. The sanction for not insuring one's house stays between RON 100 and RON 500. Home owners could also buy insurances to cover the real value of their house. There are over 8 million housing units in Romania, according to statistics.