The wildfires that swept through Greece last week will see little if any claims through the private insurance market as the government steps in to fill the gap in catastrophic losses.
Wildfires swept though the the northern and eastern regions outside Athens last week. According to published reports, more than 80 square miles were burned and over 150 homes were destroyed, including farmland and olive groves that will take generations to regenerate.
A majority of the damaged and destroyed homes were located on the outermost edge of Athens, where a majority of the homes were uninsured, says Alexander Nezeritis, senior account executive with Aon Hellas in Athens.
Nezeritis explained that according to recent studies of the Greek insurance market, nine out of ten homes in Greece are uninsured, and past experience has shown that the private market has limited exposure.
“The majority of homes that are insured are usually found downtown in the high-density urban areas and not in the outskirts,” he said in an email response to several questions. “Furthermore, after the comparatively more-destructive wildfires that struck the Peloponnese in southern Greece two years ago, there was no noticeable impact that followed on the insurance market.”
In 2007 wildfires burned for more than two months in Greece, burning 679,500 acres and killing 76 people.
Without a private market response expected to this year’s fires, the Greek government has already announced measures to address some of the losses from the wildfires.
According to Nezeritis, the measures include:
–For homes up to 120 sq. meters that were totally destroyed, the government provides EUR 750 per square meter (i.e. a maximum of EUR 90.000 per home up to 120 sq. m).
–For repairs, the maximum amount of EUR 450 per sq. meter is allocated
–For the counties most hit by the fires, an emergency subsidy of EUR 3.3 Million is granted
–Finally, the amount of EUR 20 Million has also been set aside for the assistance of farmers and livestock breeders that were hit by the fires.
“The bulk if not all of the compensation for those hit by the fires will be paid by the government and not the insurance market,” Nezeritis added.