How Much Will Insurance Providers Pay Out for Zagreb Earthquake Damage?

Lauren Simmonds

Copyright Romulic and Stojcic
Zagreb, Croatia
Zagreb, Croatia

As Novac/Vedran Marjanovic writes on the 19th of September, 2020, Croatian insurers have so far paid out for 6,255 claims for earthquake insurance policies in the total amount of 194 million kuna, the leaders of the Croatian Insurance Bureau announced. They state, however, that they’re still receiving requests from people due to Zagreb earthquake damage.

”Although we’re still receiving requests for Zagreb earthquake damage assessments and part of the requests are still being processed, the amount of damages paid out so far, when looking at the total amount of Zagreb earthquake damage in the city and its surroundings, things clearly indicate that we as a society are significantly uninsured or at least underinsured,” said a member of the Management Board of Croatia osiguranje, Vanco Balen.

Stating that the average premium for earthquake insurance stands at around 800 kuna, Balen stated that the average damage amount paid out for this year was more than 30,000 kuna, concluding that the damage was, in many cases, far higher than the annual average premiums amount to.

The Croatian Insurance Bureau estimates that insurers will pay out a total of 400 million kuna to 500 million kuna in damages in connection with the earthquake which struck Zagreb and its surroundings back in March this year. They note that general global experience shows that the deadline for payment for earthquake damage is about two years.

Balen warned that the March earthquake in Zagreb was not a solitary natural disaster, that floods and storms were frequent, concluding that ”insurance is a civilizational response to situations such as natural disasters”.

”If we know that the previous earthquake recorded with the same strength as the one in Zagreb back in March this year took place 140 years ago, we can say that we can be calm for the next 140 years. But is that so? I’d like to remind you of the statement of Professor Snjezana Markusic that the fact that we had a magnitude 6.3 earthquake in March indicates an increased possibility of a new earthquake, perhaps even one of a stronger magnitude,” warned Slaven Dobric, a Member of the Management Board of Allianz osiguranje and President of the Croatian Insurance Bureau.

In the years preceding this year’s earthquake, the total premium of Croatian insurers in earthquake insurance was about 80 million kuna. Insurers expect that this year the aforementioned premium will reach 110 million kuna.

”On the day of the earthquake alone, we had many more insurance policies agreed online for earthquakes than we  usually do, which speaks of the growing awareness of citizens about the importance of this policy. But raising that awareness must be further accelerated through the strengthening of financial literacy and the like,” commented Vanco Balen.

The President of the Management Board of Euroherc osiguranje, Ivana Bratanic, pointed out the comparison of the average insurance premium per capita in the European Union of 2,170 euros with the same Croatian indicator of only 347 euros.

”If we increase the level of awareness about the necessity of investing in insurance, we’ll also reduce the financial burden of the state in repairing damages,” warned Ivana Bratanic when discussing the Zagreb earthquake damage payments.

As an additional lever for the more effective protection of property from earthquakes, insurers suggest contracting insurance policies for common areas in residential buildings, which, they say, were generally not contracted in buildings in the centre of Zagreb, which were hit hard by the earthquake which rocked the city back in spring.

Insurers welcomed the recently passed Law on the Reconstruction of Buildings Damaged by the Earthquake in Zagreb and its Surroundings, because, as Slaven Dobric pointed out, citizens who had adequate insurance coverage will have a reduced financial burden during the reconstruction.

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