IIC to Offer Earthquake Insurance

Iran Insurance Company, the nation's sole state-owned insurer, plans to offer earthquake insurance policies for residential units, an official with the company said.

"To alleviate people's concerns, independent earthquake policies aimed at covering residential units will be implemented in the first pilot phase in the three provinces of Isfahan, Kerman and Yazd from Feb. 1," Mohammad Zahednia, IIC's deputy for technical affairs, was also quoted as saying by the company's website.

As soon as the Central Insurance of Iran, the industry's regulator, signs off on it, the coverage will also be extended to other provinces.

This comes months after a massive 7.2 earthquake shook the western province of Kermanshah in the biggest such event in the past decade, which claimed the lives of more than 600 people.

Scores of other earthquakes have taken place since then in various provinces throughout the country and two were even felt in Tehran, but they were minor with little to no casualties and damage.

According to Zahednia, buildings subject to the 2800 Standards devised by the Ministry of Roads and Urban Development, buildings with concrete, metal and brick frames dating back to 20 years, in addition to all the accessories inside the buildings, the cost of providing temporary residence for quake-stricken citizens and clearing the rubble up to a ceiling, will all be covered as part of the earthquake insurance policies.

The official has reassured that in light of coverage obtained by Iran Insurance Company from credible reinsurers, the company has enough capital to ensure the safe implementation of the earthquake insurance scheme.

As to how the premium rates will be devised, he said various cities and districts have been divided into five categories according to the level of risk faced by them, based on which the insured will have to pay the premium.

"Along with the earthquake insurance coverage, the Central Insurance of Iran plans to establish a natural disaster insurance fund," CII President Abdolnasser Hemmati said, adding that more than 85% of residential units are not covered by fire insurance, the type of insurance that also includes earthquake coverage.

The bill for the establishment of the natural disaster insurance fund, whose contents are now under review, reportedly contains insurance policies that will have a mandatory base as well as optional features covering flood, earthquake, hurricane, lightning and tsunami.