Every person throughout his life, consciously or unconsciously, is exposed to various risks that can have negative consequences on the real estate that he owns. Appropriate financial protection instruments against damages that may arise from the various risks we are exposed to daily. One of the most effective methods of obtaining financial compensation in the event of damage is voluntary property insurance. Property insurance not only protects your property from damage or theft but in most cases, it facilitates your work. The basic purpose of insurance is to enable you to compensate for a claim in the event of a claim. Through a property insurance scheme, individuals or entities have the opportunity to obtain financial compensation in cases where it is established that their property has suffered damage as a result of a force majeure that occurred outside the control of the owner.
Put simply, you agree to pay a certain fee to an insurance company in exchange for a promise from the company that it will financially compensate you in the event of potential damage to your property in the future. Insurance is a form of risk transfer from the client to the insurance company. In this way, insurance reduces the financial burden on a family or business and has a significant social impact as it reduces individual and public costs in the event of unforeseen disasters.
History 1,2
The application of property insurance dates back to the period before World War II when Italian insurance companies in the 1930s and 1940s helped to create a model insurance market in Albania. These companies originally operated in the main cities of the country for products such as building insurance, industry, accident insurance, life insurance, and natural disaster insurance. In the period 1948 - 1965, new forms of insurance were introduced in Albania, such as compulsory insurance of state rented housing; compulsory passenger insurance; voluntary insurance of property, buildings and immovable property; voluntary life insurance; voluntary insurance of crops and livestock; voluntary disaster insurance; voluntary insurance of household items; voluntary insurance of property of former agricultural cooperatives, organizations and citizens and livestock; compulsory insurance of import, shipping, and freight goods (formerly the international transport undertaking); voluntary fire insurance of buildings, etc. The State Savings and Insurance Institute was the first institution to collect the savings of citizens, the savings they had, and to provide cooperatives and export-import enterprises.
With the creation of the first pluralist parliament, on July 31, 1991, the first two laws on the creation of two financial institutions were adopted: the Savings Bank and the Insurance Institute (INSIG), thus separating the State Savings and Insurance Institute. The insurance market would thus become the first important segment of the financial market that developed soon after Albania entered the free market economy model of the last decade of the last century.
Today the insurance market is the largest and most advanced non-banking financial market. Companies operating in the insurance market, together with investment funds and private pension funds, are under the direct supervision of the Financial Supervisory Authority (AFSA).
Some property security initiatives have recently been taken in Albania. Compulsory insurance for buildings is provided by Articles 42 and 47 of Law no. 107/2014, dated 31/07/2014 “On Planning and Development of the Territory” as amended. Also According to DCM No. 694, 2.10.2019, it is stipulated that “the builder, before submitting the construction permit, must perform and submit compulsory insurance contract covering civil and professional liability arising from errors and omissions leading to non-compliance with applicable legislation and planning documents, according to Article 47, paragraph 2, of Law No.107 / 2014, dated 31.07. .2014 "On Territory Planning and Development" .3
According to this decision, it provides for compulsory measures for developers, developers, investors, to conclude a 10-year insurance contract with apartment buyers, the contract covers damages to the resulting third party, where due to the ground or construction defect, construction collapses - partially or completely, or presents a risk of collapse.
According to information published by AFSA for the period 2017-2018 which analyzed the data of all companies operating in the insurance market, it is noted that the growth rates of property insurance against fire and other additional risks, in 2018 have been over 9% compared to 2017. It is also estimated that among the insured buildings, 75% of them belong to residential houses and 25% of insured buildings are business premises. This growth rate is due to both the number of contracts signed and the volume of gross written premiums, the official report said. The graph shows the performance of gross written premiums volume for the period 2014-2018.
Even during the first quarter of 2019, 10459 property insurance contracts were concluded, which are mainly for residential apartments. Statistical indicators for the first quarter of 2019 show a 6.88% increase in the number of contracts concluded between January and March 2019, compared to the same period a year earlier.
According to data published by AMF4, the per capita premium in Albania in 1999 was ALL 562, while today it is on average EUR 35 per year, which is lower compared to other countries in the region with Kosovo at EUR 43 per year and Macedonia. North with 65 / year euro. While the average per capita premium per year for EU countries averages 2,154 euros per year. Despite improving living conditions, Albania continues to remain a poor country with relatively low per capita average incomes compared to the region. This is a determinant factor that indirectly affects the low level of property insurance by the population. Another factor related to the low level of property insurance is also related to cultural factors. For the majority of the population, property insurance is seen more like a financial burden weighing on the family budget without any concrete, direct benefit than as secure financial protection against life's unexpected. closely linked to the fact that most do not have the confidence that domestic insurance companies can effectively guarantee real financial compensation in the event of force majeure.
Insurance activity
Insurance activity means the signing and enforcement of insurance contracts entered into between the insurance company and the insured, whether that individual or business.
The insurance policy is the legal document that defines the rights and obligations between the insurer and the insured contractor. The insurance policy is the final written document of the insurance contract it represents and the insurance agreement; contracted.
Property insurance means:
• Providing homes and apartments
• securing premises
• provision of administrative facilities
• providing for small businesses
• providing for large (industrial) businesses
The property insurance contract offers coverage for a variety of risks including, among others, fire and natural forces such as earthquake, flood, storms, snow, landslides, fire, lightning strike, explosion, collapse of an air object, storm, hail, motor vehicle collisions, floods, landslides, landslides, snow weights and avalanches, water leakage from installations, fluid leakage, self-igniting reserves, spillage liquid thawing, third party liability, earthquake. etc., which can cause damage to your property. In these cases
any individual or business that owns a legitimate property and has an interest in indemnification from the economic consequences that would result from the above risks may be insured with an insurance company that also has an interest in the business.
The elements to consider when securing a property related to:
• Amount insured (value of the apartment/business);
• Type of property, where the division can be in industrial buildings, hotels, and restaurants, shops and malls, administrative offices, etc.;
• The physical condition of the property, year of construction, security measures, location, the examination of damage history of the secured facility, etc.
What should you consider before insuring your property?
Insurance activity and insurance intermediation activity can only be performed by insurance companies and insurance intermediaries (agents, brokers, brokerage companies) licensed or approved by the Financial Supervisory Authority. But unfortunately, it may happen that unlicensed persons will offer you fake insurance contracts or be presented using the unauthorized name of licensed companies. Purchasing insurance products with a company, or an unlicensed broker causes serious financial and personal damage and expense to our customers, businesses, government, and society. Insurance scams victimize innocent people for every penny paid. These ghost societies operate as part of the black market. The professionalism of the insurance company you choose and the market experience are very important elements that need to be verified before you can start cooperation.5
"Look for quality insurance - remember," cheap insurance can be very expensive. "
Simple tips to help RealPas facilitate this process.
• Choose live meetings
The best way to get information is to go directly to insurance companies or speak to an independent Insurance Consultant who deals with multiple companies, as opposed to a traditional insurance agent or financial planner working for only one insurance company. insurance. The most important principle on which you rely on the work of an insurance consultant is protecting the interests of clients. He is an independent entity from insurance companies and the purpose of his job is to "find" the client the best insurance product. checking the contents of the insurance policy before signing it by the client.
• Compare costs and insurers across the country
Getting multiple impressions is important when looking for a particular product. Comparing some companies will enable you to make the right choice. Contact five or more companies so you can compare the terms offered for each offer. Some insurance companies offer a special deduction for certain categories of individuals such as the elderly or those who work from home. The rationale is that both of these groups tend to be in the environment more often - leaving the homeless prone to theft. Discuss every detail of the insurance terms to select the best option possible.
• Meeting expectations
After a major loss, the burden of paying to repair your home and expecting compensation from your insurer can put your family in a difficult financial position. Before agreeing with your insurance company, find out true with professionals. Look for the explanations needed to fully understand what causes you are covered by and what eventualities you are excluded from. Learn about your legal rights that guarantee effective enforcement of your insurance policy.
• Do some additional verification
Check if the information or price you are given corresponds to the official average market prices published on the AFSA official website or the insurance company's official website. If in doubt, contact your insurance company for more information with your insurance company. Every insurance company has its official website where it publishes information about it and the insurance products it offers. Carefully read and check the information contained in the insurance contract (insurance policy). Be careful if you find that the insurance policy has corrections, deletions or unreadable parts. Although minor and trivial errors may seem, you may have a counterfeit policeman on hand.
The insurance market in Albania is small. Statistics show that Albanians consume very little insurance, averaging no more than 2100 ALL per capita per year, although they are in much greater need of practice. The number of citizens interested in property insurance has increased especially after the damage from the 26 November earthquake.2
Property insurance is a must for any citizen as it provides a quicker solution to the problem. Insurance companies start on the spot immediately after the damage is done and start work on rebuilding in case of destruction or damage reimbursement. Speed in action procedures, as opposed to procedures that the government must follow in the event of natural disasters to approve funds, is another advantage in favor of citizens.Citizen awareness is a key element that will lead to improved statistics related to property insurance. It is important to understand that property insurance brings many advantages as it relieves the financial burden on the injured. We must never forget that property insurance is not a luxury but a necessity.
1. Property Insurance History https://www.slideshare.net/AgronBerisha3/historiku-i-insurance-86817046
2. Historical development of the insurance market in Albania
3. Law no. 107/2014, dated 31/07/2014 “On the planning and development of the territory” and DCM no. 694, 2.10.2019 DCM no. 694, 2.10.2019
4. Financial Supervisory Authority (AFSA) https://amf.gov.al/publikime.asp?id=2
5. Licensee Registry: Insurance Market https://amf.gov.al/ts_shockeri_insurance.asp