In two major legislative initiatives for compulsory insurance business and vehicles against natural disasterThe Government went on these days with the publication of the relevant JMDs.
The aim is to enhance the resilience of the economy and to better manage the consequences of extreme weather events, as well as to distribute economic weight from the consequences of natural disasters, in order to avoid risks of fiscal derailment for the state. Decisions put in force on compulsory insurance for vehicles and businesses from June 1, 2025.
As far as the first JMD is concerned, any business with an annual turnover of more than EUR 500,000 is obliged to insure 70% of the value of its assets (real estate, equipment, raw materials, stocks, etc.) for floods, fires and earthquakes.
The setting excludes among others:
- Public enterprises and public bodies,
- Arbitrary constructions and underground/underwater infrastructure,
- Rural farms and newly established businesses without declared revenue.
A fine of EUR 10,000 is imposed on those undertakings that do not comply, with a doubling of the amount if the non -compliance is maintained for more than 30 days.
Vehicle Insurance: New claims for owners
The second JMD concerns all vehicle owners who have Greece as their parking lot – even if the vehicles are in immobility. The new mandatory coverage concerns forest fires and floods, and is calculated on the basis of the commercial value of the vehicle.
There are no administrative fines for the lack of this coverage. However, in the event of a disaster, non -insured owners will not be entitled to state compensation, even if they meet the other conditions of support.
The need for the above measures is clear if one considers that the insurance costs from natural disasters in Greece reached € 968 million in 1993 – 2023, of which 700 million were paid only in the last decade. Floods are the most common phenomenon, while fires cause the highest average damage per case – up to 46,000 euros per compensation application.
Major disasters, such as the fire in Eye, Daniel and Ianos, demonstrate the increasing financial risk for citizens, businesses and insurance system.
What are the obstacles and what do insurance companies want
However, the obstacles are not few, as the climate crisis also increases the risks that insurance companies consider “non -insured”.
Legally, insurance companies maintain the ability to evaluate risks as non -insured, in accordance with their internal risk assumption policy, under international regulations and supervisory instructions (eg Solvency II).
This means practically that if, for example, a property is in a high -risk area, insurance may either refuse coverage, offer a high premium, or seek extensive compensatory measures (eg flood protection, remote materials).
According to market estimates, these companies that receive continuous refusals from insurance companies to enter into a contract amount to approximately 4,000, and therefore recently the Association of Insurance Companies of Greece have proposed that their insurance coverage will be done through co -operation with the participation of the insurance companies.
In this regard, the financial staff included in the JMD explicit prediction that if a business receives two refusals from different companies, it documented that the risk is not an insured in the market and is excluded for two years from the obligation, and avoids a fine of 10,000 euros.