Mon, May 19, 2008 - Page 12 News List

Earthquake insurance coverage rate increases since 2002 launch

By Joyce Huang  /  STAFF REPORTER

Of the nation's 7.6 million households, only 24.48 percent held residential earthquake insurance policies as of March, the Financial Supervisory Commission's (FSC) latest statistics showed.

The nation’s count of earthquake policies, which were first launched in April 2002, had climbed from a 5.99 percent take-up rate in 2002 of 455,498 policies to a total of 1.91 million policies in March.

LESSONS TO LEARN

FSC Vice Chairwoman Susan Chang (張秀蓮) urged the nation’s citizens to learn lessons from China’s catastrophic 7.9-magnitude earthquake in Sichuan Province and take precautionary measures.

She said late last week that premiums on local residential quake insurance policies were fixed at NT$1,459 (US$48) per year, which would allow insured policyholders to claim up to NT$1.2 million in compensation with an additional NT$180,000 for temporary residential expenses should any unforseen events cause damage to the policyholder’s residence.

The commission warned that, following the 7.3-magnitude 921 Earthquake in central Taiwan in 1999, seismologists have concluded that there were more than 51 active fault lines spread across the country that could trigger an earthquake at any time.

NOT MANDATORY

The quake insurance isn’t mandatory although most banks require that their mortgage loan debtors take up such precautionary policies.

But many households that have not taken up any mortgages often ignore the importance of having a policy, the commission said.

As of the end of last year, the Taiwan Insurance Institute’s (保發中心) statistics showed that the nation’s residential earthquake fund had a total of NT$6.1 trillion in special reserves, with NT$5.8 trillion in premium income after paying out three claims worth NT$3.13 million.

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