Newcomers fill insurance void

Tuesday's 6.9 Richter temblor has, for many prudent homeowners, again highlighted the need for quake insurance to guard against property damage.

Yet after the 921 quake, not every insurer is willing to sell such policies, especially the large firms. But new insurers, on the other hand, are willing to take new orders.

According to the Non-Life Insurance Association of the Republic of China (??華民國2ㄙ垂O險商業|P業?蔆|), there exists a theoretical standard premium for quake policies for every non-life insurance firm nationwide.

Ideally, insurers would simply sell a standard quake policy to any consumer who wanted one. This system worked well for years until it was suddenly disrupted by the 921 quake.

The standard premium for quake insurance is NT$1,100 to NT$5,800 for every NT$1 million of coverage. The rate varies depending on a home's location and the number of its floors.

For example, if one lived in a 12-story building in Taipei, the premium would be NT$1,861 for every NT$1 million in coverage.

In addition, quake policies must be combined with fire coverage. With fire insurance costing around NT$550 for every NT$1 million in coverage, a combined policy would cost about NT$2,411.

But in the aftermath of the 921 quake, most insurers have been reluctant to sell quake insurance policies in devastated areas such as Taichung (台??) and Hualien (南投). Even in areas such as Taipei, many consumers still cannot find the coverage they need.

The lone exception is Fubon Insurance Co (富?2?I), which said yesterday it would resume selling quake policies after refusing to do so.

Big insurers say foreign reinsurance firms will not allow them to sell additional quake policies because capacity has already been exhausted. In other words, local insurers are permitted to sell a certain number of quake policies -- under contract with the reinsurance firms -- and that number in many cases has been reached.

Big insurers also say that, because of historic low demand, they did not bother to negotiate with foreign reinsurer partners for more capacity. If the big insurers wish to sell more quake policies beyond their set limits, they must pay higher costs to get the additional policies.

Fortunately, there are some newcomers that offer a glimpse of hope for worried homeowners.

"We offer a maximum of NT$3 million in earthquake coverage for homeowners in Taiwan, including devastated areas struck by the 921 quake," said Lin Shin-chiu (林-か]), a manager at NEWA Insurance Co (新|w2ㄙ垂O險).

NEWA, a non-life insurer started in February, is new to the fire and other property insurance markets.

"As long as it's a concrete building in Taiwan, you can get it insured. If the building is in a devastated area, it has to be examined before acceptance," Lin said. "In other areas, just fill out the application form and provide a description of the status of the building. It can be accepted after a simple review procedure."

NEWA isn't the only newcomer on the block.

"We offer quake and fire insurance policies to every consumer in Taiwan, and there is no limit on coverage," said Lee Hau-chi (李浩2N), vice president of Allianz President General Insurance Co (2?@|w聯).

Allianz President General Insurance Co started in July after taking over Eagle Star President General Insurance Co. Still, Allianz President is considered a small player in the Taiwan market.