April 25, 2023 rcplegal 0 Comments

Law 260/2008 regulates the conditions of compulsory insurance of homes owned by natural or legal persons and the relations between the insured and the insurer, as well as the rights and obligations of each party related to the contract of compulsory home insurance.

The law project on the amendments applied to Law 260/2008 received the decisive vote in the Parliament and is about to be promulgated.

A series of amendments to this law will be adopted, as follows:

1. Currently, the insured amounts and the insurance premium that must be paid for concluding the PAD policy are expressed in euros, but soon, these amounts will be expressed in lei. Insurance premiums for type A homes (buildings with a strong structure made of reinforced concrete, metal or wood or with external walls made of stone or burnt brick) will increase from approximately 100 lei (20 Euros) to 130 lei/ year, and for type B homes (buildings with exterior walls made of unburnt brick or any other materials not subject to heat and/or chemical treatment) the amount will be 50 lei.

2. The sums insured on the date of conclusion of the annual contract, pursuant to this law, are expressed in Euros, 20,000 Euros for type A houses and 10,000 Euros for type B houses, but they are to be expressed in lei, 100,000 lei for dwellings of type A, respectively 50,000 lei for type B.

3. The compulsory home insurance contract is concluded in writing, either directly between PAID and the owner, or through insurance companies. The validity of the PAD contract is for a period of at least 12 months, starting at the earliest from 00:00 on the fifth calendar day from the date on which the insurance contract was issued. The contract can be issued, with the agreement of the parties, for periods longer than 12 months, only in multiples of 12 months and in case the owner of a house changes, the PAD contract remains valid until the date mentioned in the contract, the insurance beneficiary following the new owner.

4. Another change concerns the buildings classified in the I seismic risk category, an optional insurance will be concluded for them, but, normally, an optional insurance can only be concluded if there is an already existing mandatory PAD insurance.

5. According to the new changes, the home owner will be obliged to present a mandatory home insurance contract in force on the date of the request for registration or modification of the home’s registration in the land register.

6. If a person is insured both by a compulsory insurance contract and by an optional insurance contract, the compensation payment will be made according to the conditions of the compulsory insurance, and for the insured amount that exceeds the amount insured by the PAD contract, the payment should be made based on the contract for optional insurance.

It is also specified in the law project that the state reserves the right not to grant compensation to the owners whose homes are damaged by natural disasters, when they are not insured through a PAD contract.

If natural or legal persons do not comply with the home insurance obligation, it is considered a contravention and they can receive a fine between 100 lei and 500 lei.

Author: Atty Felicia Cioflan

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