ECONOMY

Car premiums and compensation to rise

Car insurance premiums will rise in Greece when the European Union’s Fifth Directive is incorporated to Greek legislation, the Association of Greek Insurance Companies (EAEE) said yesterday. Giorgios Tzanis, head of EAEE’s Information Technology Committee told a press briefing that premiums will rise to ensure uniform minimum coverage for civil liability of 1 million euros for bodily harm and 500,000 euros for material damages for victims of accidents. These sums will be automatically adjusted for inflation every five years. Compensation for pedestrians and cyclists will be mandatory, irrespective of responsibility, and car passengers will be compensated even if they had advance knowledge that the driver was under the influence of alcohol or toxic substances. The Directive also provides for the abolition of an exemption from insurance for certain categories of vehicles. Yiannis Linos, head of EAEE’s Property Insurance Committee said the industry had limited capability for providing cover against terrorist acts. The European Commission is considering various possibilities, such as the counter-insurance of risks by a European pool of companies, and state coverage in the form of guarantees or additional counter-insurance. The head of the International Relations Committee, Hieronymous, said that despite the legal framework for the European single insurance market, a very significant part of its national segments continued to function independently in a closed fashion. However, the Single Administrative License, which laid the basis for a single insurance market, is being gradually complemented with new provisions, he added. The decision is part of the government’s effort to bring inflation down. Inflation, which stood at 2.4 percent year-on-year at the end of November, rose to 3 percent in December and is widely estimated to have exceeded 4 percent in January, due mostly to inclement weather and steep price rises in fruits and vegetables.