The Insurance Pool against Natural Disasters (PAID) Romania was established in November 2009 as an insurance and reinsurance company, formed by an association of insurance companies in order to provide Romanian homeowners with compulsory home insurance in accordance with the provisions of Law no. 260/2008.  Under this law, PAID covers three specific risks within Romania: earthquake, flood, landslide.

Two types of policy are offered by PAID: Type A (policy limit of EUR 20,000 per dwelling /premium EUR 20) and Type B (policy limit of EUR 10,000 per dwelling /premium EUR 10).

Coverage type depends on the type of property, with generally the properties of more basic construction being covered by Type B policies. Currently more than 90% of the policies in the portfolio are Type A policies. The coverage is on first loss basis and there is no deductible.

PAID uses the insurance companies in Romania as its sales and distribution network. All insurers in Romania authorised to write catastrophe business have direct access to PAID’s underwriting system and directly enter details of the policies sold on a ‘live’ basis. The claims handling is performed by the insurance companies if the policy has been issued through them or by an outsourcing company contracted by PAID if the policy has been issued directly by PAID. Insurers are legally required to sell these policies on behalf of PAID only and may not compete directly with PAID or offer similar coverage for these named perils. 

• PAID Programme Summary