Flood damage: Insurers agree to pay less than 35c on the euro

Flood damage: Insurers agree to pay less than 35c on the euro
© Nicolas Maeterlinck for Belga

The government of the Walloon region has reached an agreement with the insurance industry on a sharing of the damages caused by the recent flooding in the region.

The cost of repairs to housing, roads and waterways is estimated at between €1.3 billion at the low end and, according to the insurance sector federation Assuralia, as much as €2 billion.

Technically, the insurers are only legally liable, under disaster fund legislation, for €320 million of the total bill, but thanks to an agreement reached with Walloon minister-president Elio Di Rupo (PS), the industry will pay €590 million.

The limited liability for insurers was introduced by economy minister Marc Verwilghen (Open VLD) in 2004 specifically in the case of natural disasters. In such cases, the damage caused can go beyond any possible advance estimate, in which case the government steps in to take care of the rest.

The increased share appears to be a generous concession, but the fact remains that the insurance industry will be paying a share of only 35 eurocents for every euro spent on the massive recovery project, assuming a conservative estimate of €1.7 billion.

"We have decided to fully compensate every insured victim, even if the cost of damage would exceed the legal limit," Hilde Vernaillen, president of Assuralia, told the VRT.

The remainder will be the responsibility of the region – in practice, the taxpayer. But the insurers have made another concession: the €590 million will be transferred immediately to Wallonia, so that victims need only deal with one official instance, and submit one compensation claim.

"We hope in this way to take away some of the anxiety among those affected who should feel that they are being taken care of today," said Vernaillen.

The Walloon government will now put a bill before the parliament to make the agreement legally binding as early as possible.

Victims need to feel that they are being taken care of today, as the insurers take up their social responsibility and redouble their efforts. In collaboration with the government, we will ensure full compensation for all victims," said Vernaillen.

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