Mandatory flood insurance
The floods this year in the CR are sometimes compared
to the terrorist attack in the U.S. last year. The
comparison usually falters, but there is at least one
similarity. Insurers are using the floods to prepare the
public for higher premiums, just as they did after the
attack. The problem, local insurers say, is that the CR
has been hit by "100-year" floods twice in five years,
which makes reinsurers nervous. Analyst Mojmír Hampl
of Česká spořitelna forecast that reinsurers will cover
about 60% of the estimated Kč 20bn reimbursed by
insurers. CEO Ladislav Bartoníček of Česká pojiovna
said in Euro that reinsurers could have to pay as much
as Kč 20bn. This means much higher future rates. The
only way forward, he argued, is to change the system.
One possibility, he said, is to require everyone to buy
flood insurance, even those living on a hill.
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