The recent devastating fires in the mountainous region of Limassol have seriously tested the residents and the insurance sector of the island nation. According to regulatory authorities, insurance companies are preparing to pay approximately €17.5 million in compensation to those whose homes, vehicles, and other property were damaged.
Official statistics show that 295 people have been affected. Among the filed claims are 17 damaged cars worth €171,900; 266 damaged houses, amounting to €16.49 million in losses; and 12 other damaged buildings, amounting to €874,000 in losses. This disaster is a clear example of how natural disasters can destroy property in an instant, making insurance a necessity, not an option, in such cases.
Insurance is not a luxury but an investment in safety
Cyprus's Deputy Insurance Commissioner Ntinos Kalopsidiotis noted that property insurance should be viewed as an investment in one's financial stability, not an expense. Without insurance, the cost of restoration can be prohibitive if a home or business is hit by a natural disaster.
At the same time, there is still a stereotype in Cyprus that home insurance is an unnecessary expense, especially if it is not required for a mortgage. Many owners mistakenly believe that major disasters are rare on the island. However, recent fires have shown the opposite; climate change is increasing risks, and losses are becoming more widespread.
Why is the level of insurance in Cyprus still low?
Despite the gradual growth of insurance awareness, Cyprus's figures are still far from European standards. This is particularly noticeable in rural and mountainous areas, where incomes are lower and risks are higher. Many homes and farms in these areas remain uninsured even though they are most often affected by fires and natural disasters.
The main reasons are the underestimation of threats, the cost of policies, and the lack of a habit of insuring property unless it is directly necessary. However, experts point out that the annual premium paid to an insurance company is incomparably lower than the cost of rebuilding a destroyed home or business.
Are insurers ready for new challenges?
Cyprus's modern insurance system operates according to European standards, guaranteeing control over companies' capital and liquidity. However, the industry is facing new challenges. The climate crisis is increasing the frequency and severity of disasters, forcing insurers to rethink their models.
Companies are adapting by changing contract terms, strengthening customer protection, and expanding the range of covered risks to include fires, floods, earthquakes, and other threats. At the same time, technology is being used more and more—digital services are speeding up the process of filing claims and receiving compensation.
How the compensation process works
The procedure is governed by a contract between the customer and the insurance company. To receive payment, the property owner must report the incident promptly and provide all necessary documents. Insurers must act within a reasonable timeframe and in a transparent manner to ensure customers receive fair damage assessments and compensation.
According to Kalopsidiotis, supervisory authorities closely monitor companies to ensure they fulfill their obligations. The capital and financial stability of insurers are regularly monitored to guarantee that they can meet their obligations to victims.
The new reality: insurance as protection against climate threats
Natural disasters are becoming increasingly frequent in Cyprus, causing millions of dollars in damage. This is why more and more experts are calling for a change in attitudes toward insurance. For Cypriots, insurance is not just a way to play it safe; it is a necessary tool for protecting their capital and their families. In the context of climate change, insurance is becoming part of a security strategy, just as important as fire safety measures or building reinforcement.
The fires in Limassol were a wake-up call for property owners across Cyprus. Losses amounting to tens of millions of euros demonstrated that the absence of insurance can lead to financial ruin. In today's world of increasing climate threats, insurance is not a luxury, but an essential part of protecting your property.
Homeowners and businesses must choose between spending a modest amount on a policy or risking the loss of everything. In Cyprus, the future belongs to those who prioritize safety.