Tsvetanka Krumova in the morning broadcast of Bulgaria on Air TV
Mandatory property insurance will have negative impact on the market
The Executive Director of Armeec Insurance JSC, Tsvetanka Krumova commented in the morning broadcast of Bulgaria on Air TV the proposed amendments to the Disaster Protection Act and the results of the introduction of compulsory property insurance.
According to the proposed draft act in disaster situations the state will assist only people with very low income in accordance with the Social Assistance Act. The money will come from taxes on insurance premiums. Owners with higher income, who suffered damages will receive compensations only from insurance policies signed, commented Ms. Krumova. According to her, obligatory insurance would hardly take place because many of citizens residences do not meet the requirements of insurers. They are illegal or with violations in the structure and construction. She expressed the opinion that the introduction of compulsory insurance would negatively affect the insurance market because it will inevitably lead to lower compensations for customers. According to Ms. Krumova, the increased interest in policies after major natural disasters is often a temporary event and unfortunately it passes away quickly after the catastrophic phenomenon, because Bulgarians have no practice to insure their property. This is not only due to the low income and unemployment, but rather to poor insurance culture. The statistics for April this year is positive, a growth of just under 5% is reported of all contracts in property insurance.
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