As wildfires ravage Attica, Greece is confronted with a stark reminder of the urgent need for property insurance against natural disasters. The current crisis highlights the need to protect homes and businesses as flames consume factories in Vrilissia, Penteli, and Chalandri, forcing businesses to contend with the devastating aftermath.
In Greece, the fortification of homes and businesses against natural disasters, including wildfires remains notably low. The reluctance to insure properties stems from various factors, including the financial burden on households and liquidity constraints faced by small and medium-sized enterprises.
Additionally, government incentives are perceived as insufficient by the market.
Last year, the Greek government offered a 10% discount on property tax (ENFIA) to encourage insurance uptake, but this measure has not significantly boosted coverage. Following the discount, the percentage of insured homes increased by only 5-6%.
Currently, around 15-16% of homes in Greece are insured, and approximately 20% of small and medium-sized enterprises have insurance coverage.
The Association of Insurance Companies of Greece has called for several changes to enhance insurance uptake.
They recommend reducing VAT on health insurance, abolishing the 15% tax on premiums, and lowering the mandatory insurance threshold for businesses against natural disasters from 2 million euros in annual turnover to 1 million euros.
They also advocate for an increase in the 10% discount on property tax for insured homes against climate risks.
A survey by the Thessaloniki Chamber of Commerce and Industry reveals a hesitance among small and medium-sized enterprises to insure against natural disasters.
Only four out of ten artisans have insured their business assets, and merely 4.8% consider natural disasters, such as floods and fires, to be the greatest threat to their operations.
Despite these insights, the law mandates that only businesses with annual gross revenues exceeding 2 million euros from the previous tax year must carry mandatory insurance against fire from natural causes, floods, and earthquakes.
