Băsescu promulgates law no longer requiring holders of optional home insurance to buy mandatory policies

President Traian Băsescu yesterday promulgated the law that no longer requires those owners who already have an optional policy covering damages caused by floods, earthquakes and landslides to buy a mandatory home insurance policy. Insurance companies part of the mandatory insurance system might therefore lose more than 30 million euros in premiums, which jeopardises the operation of the system or may lead to tariff hikes.

The Chamber of Deputies, the decision-maker in this case, had enacted an amendment last month whereby individually insured homes were no longer subject to this law. The vote of deputies came after the previously approved regulations by the Insurance Supervision Commission (CSA) required owners that already had optional insurance to buy a mandatory policy, as well, which was not regarded as overinsurance. Therefore the mandatory policy should have covered the damage caused by natural disasters up to 20,000 euros with the rest of the amount up to the actual price of the home to be covered by the optional insurance.