Portuguese Insurers Call for Mandatory Multi-Risk Insurance Following Wildfires
The president of the Portuguese Association of Insurers (APS), José Galamba de Oliveira, has called for the government to make multi-risk insurance compulsory for all residential, commercial, and industrial buildings. The proposal was made in response to the government's recent announcement of measures to address the damages caused by widespread wildfires. According to Galamba de Oliveira, this is “the way to make our country more resilient and protected perante estes eventos de natureza catastrófica.”
The new legislation would be a significant change from the current law, which only requires fire insurance for properties held in a horizontal ownership regime. The APS highlights that this gap in legislation means that approximately half of all homes in Portugal are currently uninsured against fire. The association, which represents all insurance companies operating in the country, believes that generalizing the requirement is a necessary step to protect property owners nationwide.
The government announced a package of 45 measures this week to support victims of the fires that have affected the country since July. These measures include financial aid for farmers and funds for rebuilding primary residences, with the state covering 100% of costs up to €250,000. While the APS understands the immediate need for such support, Galamba de Oliveira noted that these government aid packages create a disincentive for property owners to purchase insurance policies.
“We understand the need for the Government and municipalities to support families and businesses that have lost their homes and their assets,” said Galamba de Oliveira in a statement to the press. “But it seems important to us that we reflect on the issue and evolve towards generalizing the obligation of multi-risk insurance.” He argued that such a move is essential for the country's long-term resilience.
The implementation timeline for such a legislative change has not been specified, but the APS is urging for a swift and thorough discussion on the matter. The proposal would affect all property owners in Portugal, including individuals, families, and businesses, who would be required to secure multi-risk insurance for their buildings. The specific compliance requirements and procedures would be detailed in the new regulation, should it be adopted by the government.
Industry reaction to the proposal has been largely supportive, with many in the insurance sector agreeing that a more comprehensive approach to risk management is needed. Legal professionals are beginning to analyze the potential implications of the proposed law, which would fundamentally alter property insurance obligations in Portugal. The government's stated objective with its aid package is to provide immediate relief, but the APS is pushing for a more permanent solution.
The association has long advocated for the creation of a comprehensive national system for catastrophic risk protection. “This reflection should be done within the framework of the creation of a protection system for catastrophic risks that we have been defending for many years,” concluded Galamba de Oliveira. The debate is expected to continue as policymakers weigh the immediate needs of fire victims against the long-term financial security of the nation's property assets.
Navigate Portuguese property regulations with expert guidance at realestate-lisbon.com.
