In April the government promised compulsory home insurance against storms and earthquakes. Insurers say it cannot wait
On 8 November, at the ECOseguros conference, José Galamba de Oliveira, president of the Portuguese Association of Insurers (Associação Portuguesa de Seguradores, APS), said that storm Kristin in January had made a catastrophe fund urgent. To build up the fund quickly, he said, home insurance should be made compulsory. Insurers have already paid out more than €1 billion for storms, floods and other natural disasters. The industry expects further steps “in the coming months” (ECO).
The government had already promised such a fund at the end of April. When presenting PTRR (Portugal Transformação, Recuperação e Resiliência), its post-storm recovery programme, Prime Minister Luís Montenegro announced a fund for natural disasters and earthquakes, together with compulsory insurance for homes and business premises. The state promised to help those who struggle to pay, so that insurance would be affordable for everyone (TSF). According to ECO, the fund will be financed by a surcharge on the compulsory insurance, most likely on comprehensive home insurance (multirriscos) (ECO). There is no law yet, and neither the cost of a policy nor the date from which it will be compulsory has been announced.
At present the only insurance required by law is fire insurance for flats in apartment buildings and for the common parts of the building (Código Civil, article 1429). A standard multirriscos policy often does not cover earthquakes; that cover has to be added separately. After the January storms it emerged that more than half of homes in Portugal are not insured at all (our article).
Pedro Carvalho, chief executive of Generali Tranquilidade, believes that if every home is insured, premiums will be lower on average. He also pointed out that state help after a disaster is slow to arrive.
