If it becomes mandatory to cover seismic risks, the value of Multi-Risk insurance could rise by around 50 euros a year, in an insurance policy whose average capital is 125,000 euros. The data is provided by the Portuguese Insurers Association (APS).
Given the growing seismic risk in Portugal, the president of the APS, José Galamba de Oliveira, is going ahead with a proposal to create a fund for catastrophic risks, which will lead to an increase of around 50 euros per year in the value of mandatory Multi-Risk Insurance, provided it has an average capital of 125,000 euros.
Speaking to Expresso (paid access), the insurance regulator said that it was important to “make sure that people are protected”. Furthermore, this additional amount can be “lower in certain areas”, i.e. “with less risk”, and “slightly higher in higher risk areas, such as Lisbon”. José Galamba de Oliveira believes that the fact that this cover is compulsory makes it “more accessible”, so that the more people who contribute, the lower “the value of the premium”. “Making coverage mandatory doesn’t mean a huge increase in the premium,” adds.
The president of APS also believes that the fund would have a response capacity of up to 8 billion euros, with the higher amounts being assumed by the state.
