Explosions Prompt Insurance Companies to Shift Responsibility onto Victims for Payment

by time news

Individuals who have experienced damages from explosions are subjected to the same conditions as those who have suffered damages from fires or water. Insurance compensation is based on the condition of the property prior to the damage. This means that if the property is old and requires renovations or rebuilding, an age deduction corresponding to the new standard will be deducted from the compensation. Mats Galvenius, the vice president of Swedish Insurance, indicates that this leads to a reduction in the existing value of the property and, consequently, a lower compensation.

A problematic trend has emerged, with police results revealing that 38 detonations have been noted in Sweden since early March 2023. As a result, Galvenius foresees an increase in insurance claims linked to said detonations. He states that each explosion has societal and collective repercussions and impacts policyholders unjustly. Furthermore, each explosion costs insurance companies a significant amount of money, ranging in the hundreds of millions.

The increased costs incurred by the insurance companies might force them to raise insurance prices, with the damage sustained requiring a substantial amount of time to address due to the complexity of the situation. Given that these episodes are typically crime scenes, insurance companies are unable to access the property, which puts customers in a vulnerable position. However, after the police have concluded their investigations and lifted any cordons, insurance companies can step in and perform an inspection to determine the extent of the damage and what needs to be rebuilt or demolished.

Those who have suffered damage in connection with explosions face the same insurance conditions as in the case of a fire or water damage. The compensation is then assessed based on the condition the house had before the damage.

If the house is old and needs to be renovated or rebuilt, the insurance company will make an age deduction that corresponds to the new property standard. According to Mats Galvenius, vice president of the industry organization Swedish Insurance, this means that the existing value of the house is reduced and the compensation will be less.

“Worrying trend”

According to police statistics on detonations in 2023, 38 have been registered in Sweden up to mid-March. That’s twelve more compared to the first quarter of last year.

Mats Galvenius believes that the number of insurance cases linked to detonations will increase to a similar extent.

– It is a very worrying trend. Each explosion not only causes insecurity in society and affects many innocent policyholders. It costs three-digit millions for the insurance companies, says Mats Galvenius at Svensk försäkring.

Risk of more expensive insurance

In order to cover the damage costs, the companies may also be forced to raise the price of insurance.

– You have to remember that these explosions often lead to very complex and extensive damage and that takes time. Partly because it is often a crime scene and then the insurance company is not allowed to get there.

Only after the police have lifted the cordons is the insurance company allowed to step in and carry out an inspection to determine what needs to be rebuilt and demolished.

– I fully understand that, as an insurance customer in such a vulnerable position, you find this period of time very troublesome.

Hear Mats Galvenius explain why the victim is forced to bear the cost, in the video above

You may also like

Leave a Comment