Compulsory earthquake insurance should be offered automatically to all homeowners in Turkiye with a sufficient level of coverage, a senior insurance executive has suggested.
Sompo Insurance deputy general manager, Mr Ugur Ozer, said that in any case, any losses suffered in the event of an earthquake by those who cannot afford earthquake insurance would be covered by public funds. The premium paid for from public funds can be recovered during the sale of the home, reported Insurance Gazette quoting Mr Ozer.
By reaching a coverage rate close to 100%, earthquake insurance premiums can be more reasonable and a level of protection that will cover people's real damages can be provided, he said.
He added that the most basic factors affecting the insurance penetration rate are thought to be income level and insurance awareness.
The Turkish Catastrophe Insurance Pool (TCIP) was established after the devastating August 1999 Izmit Earthquake to provide mandatory earthquake insurance to all segments of society. However, 25 years on, the insurance penetration rate is still 60%.
Unfortunately, it is not possible for those who have only compulsory earthquake insurance to cover all the damages that may occur after an earthquake (if they do not have voluntary earthquake insurance). This also shakes trust in the system.