Since people do not take out compulsory home insurance and mayors do not impose fines, the state authorities have nevertheless found a way to encourage Romanians to take out these policies: starting from November 11, any home registration or change in the land cadastre can only be made if there is this insurance.

Today, there are 9.7 million houses in Romania. Of these, only 1.98 million (20.4%) have a disaster recovery insurance policy. In rural areas, the situation is even worse: only every tenth house is insured.

Theoretically, the fine is from 100 to 500 lei. However, in practice, no fine has been imposed so far. Applying the sanction is up to mayors, who, however, need people’s votes and avoid being negative characters.

“People expect the state to compensate them in the event of a disaster. But the state finances critical infrastructure, bridges, driveways, hospitals, schools. Watch on TV and see what situation Romania’s budget is in. If someone imagines that the state will be able to compensate private houses… The state only provides emergency assistance, which is very little to live on in the short term, but it does not restore your house,” said Kosmin Tudor, director of PAID (insurance pool versus natural disasters), in the debate on this topic.

He added that, for example, after the 1977 earthquake, houses in Romania that have insurance will receive more than one billion euros for reconstruction, money that will come from own funds of 400 million lei. EUR 1.1 billion has also been PAID from the reinsurance program.

“We are ready at the moment to compensate for any event, if there are policies,” Tudor added.

Insurance is not a priority because people have low incomes

Also, from November 11, the price of policies will increase to 130 lei per year, compared to 100 lei per year now.

Dragos Sechelianu is the president of the owners’ association. He believes that the way out is not for the state to force people to take out mandatory insurance, but to take measures to prevent disasters and conduct information campaigns to show them the benefits of insurance.

“Why should it be mandatory? We disagree. The population of Romania has low financial literacy because, above all, the sources of financing are also poor. How they spend money depends on everyone, but of course, if they had a bigger source of funding, they would also have insurance.

It is not about the amount, but about the principle. How to introduce mandatory insurance? The state does not care about the prevention of those disasters that can be prevented. I agree that there should be insurance, but will there be more awareness campaigns, I think it should be. The population does not have sufficient income,” Sechelianu said.

Indeed, the obligation is unnatural, but it is necessary in Romania’s situation, answered Cosmin Tudor from PAID.

He agreed that informing the population is important and cited the example of the city of Brasov, where after the mayor sent a letter to all residents, the rate of compulsory insurance increased from 25% to over 50%.

But that’s not enough: after the Gorja earthquakes a few months ago, the number of policies taken out doubled in the following two weeks, after which none were taken out again.

Only 20% of Romanians have a mandatory home insurance policy

According to UNSAR (National Union of Insurance and Reinsurance Companies of Romania), 8 out of 10 Romanians know that they are obliged to insure their home against disasters, but only 20% have taken out a policy.

The percentage would be even lower if banks did not require such a policy when issuing loans.

The capital is the best with a weight of 38%, followed by the counties of Ilfov – 36%, Timișoara – 33%, Brasov – 32% and Sibiu – 25%.

At the opposite pole, Mehedyntsi poviats have the fewest compulsory policies – 9% and Vaslui, Teleorman, Botoshani and Alt – 8% each.