Property owners objecting to meagre wildfire compensation

Owners of property fully or partially destroyed in the wildfire that swept through mountainous Limassol in July are preparing to submit mass objections against their insurance companies for what they consider to be ridiculously low compensation.

Stockwatch on Friday quoted Souni-Zanatzia community leader Nikos Vikis as saying that the compensation proposed did not reflect their premium.

However, director of the association of insurance companies Andreas Athanasiades told Stockwatch that the companies compensated according to the terms of the contract signed by their clients.

For example, if a home sustained damage evaluated at €290,000 but the compensation given is €190,000, it means the insurance policy the owner took out only covered part of the damage.

Vikis said this meant a family would not have a liveable house as the compensation would not cover the repairs.

He also called on the insurance companies to pay out fairly, otherwise the details would be made public.

In the Limassol wildfire that started on July 23 and raged for three days, two elderly people were burned alive and hundreds of homes and businesses were lost.

According to official figures, the fire burned an area of 124 square kilometres. Seventeen communities in mountainous Limassol were affected, of which 13 suffered severe losses.

In those communities, 706 buildings succumbed to the flames – 335 were completely destroyed and 371 partially. Among them were 532 homes, 109 warehouses, 29 business establishments and 36 other constructions.

Over 775 farms also suffered total or partial loss of livestock and cultivations.

Athanasiades said recent fires had highlighted the decisive role of insurance companies in the aftermath of natural disasters.

He added that the mass claims for compensation indicated how important it was to update insurance policies and urged the broader public to make changes wherever necessary.

The latest fires showed that property was still insured based on outdated or obsolete data, with some not having been updated for 20 years, Athanasiades pointed out.

These policies, he said, did not represent the current value of property.

Regarding vehicles, Athanasiades said third-party insurance did not cover damage from fire, which only comes under comprehensive policies.

The association has 22 members whose clients have been affected to varying degrees.

These companies will be paying out compensation minus the reinsurer’s fee.

Athanasiades explained that if the total compensation to be paid out by a company for all its clients affected by the fire is €1.5 million, the clear cost to the company will be just €650,000 after the reinsurer’s fee is deducted.

Those who lost their properties in the wildfires will also be receiving compensation from the state to cover the cost of full restoration.

As home insurance is not mandatory, the association of insurance companies is considering opening a debate on possibly making it obligatory so that the people have better coverage in the event of a natural disaster, a trend already evident across Europe and beyond.