One day after the nation was shaken by a strong quake a new government-planned insurance system, which will dramatically increase coverage for such disasters, went into effect.
"Starting from April 1, customers who purchase household fire insurance will automatically have earthquake insurance included," said Tseng Wu-rin (曾武仁), a senior official at the Department of Insurance under the Ministry of Finance.
PHOTO: CHANG CHIA-MING, TAIPEI TIMES
The annual insurance premium is set at NT$1,459 per household, and customers can get up to NT$1.2 million in damage coverage.
"When a quake strikes again, it won't matter if someone's property is totally destroyed or partially damaged, as the more than NT$1 million will be paid in full," Tseng said.
The policy only includes coverage on the building itself and excludes any property inside the building. Additional coverage includes an NT$180,000 accommodation fee for people to find temporary accomodation.
According to the Department of Insurance, each year about 700,000 to 750,000 people choose to sign for new fire insurance services, and this year for the first time will also be covered for earthquake damage as well.
"Taiwanese used to be less interested in purchasing earthquake insurance, but after Sunday I believe more people will realize the importance [of insurance]," Tseng said.
Since the 921 earthquake struck Taiwan in 1999, the ministry has been trying to establish a universal earthquake insurance protection system.
For those who want to have coverage above NT$1.2 million, the charge is more expensive than previously.
"Foreign reinsurance companies have recently raised premiums, so this additional cost will be passed on to consumers," Tseng said.
The residential premium charge may jump about 40 percent. The price surge will also impact the commercial sector.
"Insurance premiums for commercial buildings will rise up to 80 percent," Tsang said.
Taiwan reported a number of serious earthquakes and typhoons over last three years, and many reinsurance companies have tagged Taiwan a "highly dangerous" location. According to the Department of Insurance, the Sept. 21, 1999 earthquake resulted in a NT$20 billion loss for foreign reinsurance companies. Last year's Typhoon Nari resulted in a NT$20 billion loss for these firms.
"They have to increase their premiums to survive," Tseng said.
Commercial insurance premiums cover buildings such as offices, retail outlets, warehouses and factories. Rates vary according to the structural strength of the building, number of floors and the building's location.
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