For the regulator, the data reveals insufficient coverage that could jeopardize the country's ability to recover from a seismic catastrophe, according to a report by ECO.
The regions in which insurers most concentrate insurance capital in the housing segment with Seismic Phenomena (FS) coverage are the Algarve, Lisbon, and Vale do Tejo, and Porto. The first two regions are also the areas with the highest seismic risk nationally.
“This fact suggests the existence of some adverse selection of risk, to the detriment of diversification between more and less exposed areas and the consequent mutualisation of risk between areas that would result”, reads the report.
Still, on this subject, the ASF states that there is a “natural limit” to diversification due to the concentration of buildings, tending to be of higher value, in areas more exposed to seismic risk, such as on Lisbon and the Algarve.
Why would anyone buy this type of insurance. The cost doubles my annual insurance (over €300 per year more )and there is a €15,000 excess. Also having to live elsewhere is limited to only a small number of months, if there was a major earthquake then it is likey you would not be able to go home for much longer than the insurance would pay out for. So to sum up, anything small the excess means it would not be covered, so it is only major or total damage and even then there are limits to living elsewhere whilst re-build would take place (bearing in mind there are not enough construction workers today), so i really can't see how it can be worth it. I had it two years running and even the insurance brokers told me it is not worth it. The insurance companies really need to address this area to make it worthwhile to insure.
By Lindsay McCaughey from Algarve on 26 Apr 2024, 14:53
It should be compulsory for house owners from Lisbon down to the Algarve, including the islands, where seismic risk is greater.
By Diogo F. from Madeira on 26 Apr 2024, 15:17