Insuring against earthquake risk

The recent tremor increased awareness of the need for insurance, and premiums might rise as a result

- NUNTAWUN POLKUAMDEE AND NAREEARAT WIRIYAPONG

The 7.7-magnitude earthquake that struck Myanmar and parts of Thailand on March 28 left significant cracks in high-rise buildings in Bangkok and surrounding provinces.

In addition to property damage, 15 fatalities were reported, 19 people were injured and more than 70 were still missing as of April 2 after the 30-storey State Audit Office, which was under construction, collapsed during the powerful quake.

While a week has passed since the earthquake rocked the capital, many condo owners are still hesitant to return to high-rise buildings due to safety concerns. Some will have to repair damaged property, but don't know how much of the damage is covered by insurance.

Another issue is the time it will take for insurers to process claims for a range of affected properties, including high-rise buildings, office towers, condos, hospitals and vehicles in Bangkok and other areas affected by the tremors.

WHAT TYPES OF POLICIES COVER EARTHQUAKE DAMAGE?

Given the significant damage to lives and property, it is clear severe earthquakes are no longer a distant threat for Thailand.

When natural disasters occur, having insurance can help alleviate the financial burden and mitigate property damage to some extent.

According to the Office of the Insurance Commission (OIC), there are several types of insurance that covers earthquake damage.

1. Fire insurance for residential property

This policy covers earthquake-related damage of up to 20,000 baht per year, with an option to purchase additional coverage. The OIC said there are 2.255 million active fire insurance policies for residential property in Bangkok and surrounding areas, in addition to 3.15 million active policies for residential property in other provinces. This totals 5.35 million active policies nationwide.

2. Condo insurance