Expert talks about insurance claims after a fire

Insurance organizations have the right to set an increased insurance premium when issuing or renewing a policy if the risks are considered significant, but it is practically impossible to cancel the policy during its validity period. This was stated by Sergey Khudyakov, co-owner of the insurance broker Mainsgroup, to "Izvestia" on January 13.

The expert emphasized that the fires in California caused an active discussion among insurance companies. However, it should be noted that many of them changed their policies a few months before: they offered the population high insurance rates when renewing policies, sometimes excluded the risk of fire or refused to renew at all. This is due to an increase in the number of fires in the region, a drop in the water level in fire reservoirs and, as a result, higher risks. This behavior of insurance companies is normal, as their business is based on their ability to assess risks and charge their customers accordingly.

In addition, there was a unilateral termination of policies at the initiative of some insurance companies, in whose standard policies there was a formal basis for canceling insurance in case of catastrophic natural disasters.

"We are talking about the so-called termination clause, a section of a policy that allows it to be unilaterally terminated upon the occurrence of certain conditions such as acts of war, abnormal weather events and other occurrences. Recently, the state authorities introduced a moratorium on such terminations and failed policy renewals to support the local population," Khudyakov explained.

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In Russia, natural disasters are also quite common - forest fires, mudslides, floods and earthquakes. The problem with home insurance is largely due to the low level of insured houses.

"Popular areas of development among our citizens are territories near forest areas, water bodies - potentially such terrain can carry risks of fires, floods, hurricanes," Khudyakov noted.

According to him, mostly insured objects of mortgages, although this practice by analogy with MTPL insurance for cars should be universal - it will minimize the consequences of natural disasters, sometimes destroying entire communities.

Insurance organizations are obliged to consider cumulation, that is, the concentration of risks in a certain area. All territories are classified according to the level of probability of occurrence of various negative natural phenomena. Reinsurance is also used in this process, which allows insurers to transfer parts of the risk to other market participants. This system functions as a means of protection for the entire industry.

"In our country, the legislation is stricter and it is unlikely that insurance companies will be able to unilaterally terminate a policy during the insurance term. Insurers can give an increased premium at conclusion or renewal if the risks are high, but it is virtually impossible to terminate a policy during its term," Khudyakov summarized.

Numerous forest fires in Los Angeles were reported on January 8. Extinguishing continues, strong winds fuel the fire, rescue crews lack water. Due to the fires in the state declared a major disaster mode. The projected damage from the disaster will amount to about $52-57 billion. More than 12.3 thousand buildings were destroyed.