What will happen in Romania during an earthquake like the one in 1977, when only one home out of five is insured

On the other hand, Romanians who have insured their homes against disasters will be compensated by PAID, the Natural Disaster Insurance Pool.

PAID has the necessary funds to compensate all owners who have taken the precaution of insuring their homes.

In February, PAID increased to 1.2 billion euros the value of the reinsurance program for the risks of earthquakes, floods and landslides.

It is the largest reinsurance program in Central and Eastern Europe.

Romania: only one home out of five is insured against disasters

Today’s reality shows that there are over 9.7 million homes in Romania.

Of these, only one in 5 is insured against disasters.

Because the amounts required for compensation in the event of an earthquake like the one in 1977 would be very large, the Natural Disaster Insurance Pool proceeded to contract a reinsurance program, in order to have sufficient funds in the event of a major event and to be able to honor the compensations.

The reinsurance program, whose capacity was increased from February 15 this year to 1.2 billion euros, is supported by more than 50 important reinsurance companies in the world.

“In the event of a devastating earthquake, the money collected from the population, the 130 lei, will never be enough, because it would take us 700 years to collect the necessary sums. That’s why the reinsurance program exists. That is, as citizens insure themselves with us, in the same way we insure, further on, with more than 50 international reinsurance companies, so that we have money at any time to compensate all those who have their home insured”, explains the deputy general director of PAID, Cosmin Tudor.

PAID has the largest reinsurance program in Central and Eastern Europe

“We have the largest reinsurance program in Central and Eastern Europe, worth 1.2 billion euros. Such an amount is not easily raised, and for this we work with over 50 reinsurers with a very good reputation, chosen with care and which, through their financial strength, ensure the necessary cash availability in the event of a major event. All this is possible because PAID benefits from an excellent international reputation”, declares, for his part, PAID’s reinsurance director, Răzvan Constantin.

In the event of a major earthquake, those who have not insured their homes against disasters will have problems. Without some savings, these homeowners will not be able to repair their homes.

“PAID periodically makes estimates of the maximum compensation to be paid in the event of an earthquake like the one in 77 or even greater. The estimates are based on scientific calculations made with international applications for catastrophic risks. These applications use data such as property location, height regime, the type and year of construction. Following these calculations, an amount of 1.2 billion euros resulted,” says Adela Mihaluca, PAID actuarial department manager.

In our country, only 21% of owners have insured their homes, while the European average is 65%.