Legal entities are obliged to conclude real estate insurances

After long delays, on the 10 th of November 2008 was finally published the Law 260/2008 regarding the compulsory insurance of real estate against earthquakes, land slips or floods.

This Law will be aplied within 120 days of publishing it in Official Gazette of Romania, respectively at the 10th of March 2009.

The Law refers not only to obligativity of houses’ insurance by natural persons but it stipulates provisions also for houses which are owned by legal entities.

So, any legal entity, who ownes houses and those are registered at Fiscal Authorities, is obliged to close an insurance contract against earthquakes, land slips or floods. In case of houses which are state ownership or territorial-admministrative ownership this obligativity is incumbent on appointed person or authorities to manage them, under the Law terms. If a house is the object of a financial leasing contract, the conclusion of the insurance contract will be the tenant’s obligation.

After long delays, on the 10 th of November 2008 was finally published the Law 260/2008 regarding the compulsory insurance of real estate against earthquakes, land slips or floods.

This Law will be aplied within 120 days of publishing it in Official Gazette of Romania, respectively at the 10th of March 2009.

The Law refers not only to obligativity of houses’ insurance by natural persons but it stipulates provisions also for houses which are owned by legal entities.

So, any legal entity, who ownes houses and those are registered at Fiscal Authorities, is obliged to close an insurance contract against earthquakes, land slips or floods. In case of houses which are state ownership or territorial-admministrative ownership this obligativity is incumbent on appointed person or authorities to manage them, under the Law terms. If a house is the object of a financial leasing contract, the conclusion of the insurance contract will be the tenant’s obligation.

The above mentioned Law distingushes between two categories of houses:

• type A – strength construction with frame of ferro-concrete, metal, wood or with outside stone walls, burned bricks or any other materials which resulted from a thermic and/or chemical treatment.
• type B – construction with outside walls made of unburned bricks or any other materials which are not under the influence of thermic and/or chemical treatment.

The insured amount which can be granted within law grounds, called mandatory insured amount, is the equivalent amount in lei, at the currency rate announced by BNR at the conclusion date of the mandatory insurance contract, of:

1. 20.000 Euro for each house of type A
2. 10.000 Euro for each house of type B

The adequate premiums for insurance amount, calles mandatory premuims, are the equivalent in lei, at the currency rate announced by BNR on the payment day, of:

1. 20 Euro for the amount stipulated at a) form above.
2. 10 Euro for the amount stipulated at b) from above.

The insurance policy against calamities, named PAD, is avalable for a period of 12 months, beginning with 00.00 o’clock from the next day of the day in which the mandatory premium was payed. Payment of mandatory premiums are made in advance, at least with 24 hours before end the end of PAD’s availability.