POMIDA calls for ENFIA tax discount on insured homes to rise to at least 50%

At the same time, the Federation’s proposal to make insurance compulsory for apartment buildings has been included among the issues under consideration by the competent committee of the Ministry of Justice as part of the reform of Greece’s horizontal property ownership legislation.

The proposals were presented by POMIDA President Stratos Paradias at an information event organised by the Hellenic Association of Insurance Companies under the title “Natural Disasters – Building a More Resilient Greece.” At the same event, Ioannis-Dimitrios Papadimitriou, Deputy Chief Financial Officer of Viohalco SA, highlighted the need to protect businesses not only against direct physical damage but also against production disruptions caused by natural disasters affecting critical suppliers.

POMIDA: Why the 20% ENFIA Discount Is Insufficient

Stratos Paradias stressed that the primary motivation for insuring a home should be the protection of the property and the ability to restore it following a disaster, rather than the prospect of obtaining tax relief.

He noted that insurance awareness remains insufficiently established in Greek society, with the debate consequently focusing largely on tax incentives. In his view, a substantial reduction in income tax across all sources of income could prove more effective than a reduction in ENFIA, Greece’s Unified Property Ownership Tax.

In any case, he described the existing 20% discount as inadequate and proposed increasing it to at least 50% to provide a more meaningful incentive for homeowners to obtain insurance coverage.

He also identified the expectation of government compensation following a natural disaster as an additional obstacle to the development of insurance awareness. According to the POMIDA president, the long-standing practice of providing financial assistance to disaster victims may create the perception that private insurance is unnecessary.

However, he noted that government assistance cannot be taken for granted or regarded as a substitute for insurance coverage, which can provide the financial resources required to restore property that has suffered significant damage.

Paradias also pointed out that many property owners continue to view insurance premiums as yet another financial burden, comparable to taxes and municipal charges. By contrast, he argued that private insurance is a fundamental financial instrument for covering restoration costs following a major disaster.

Drawing on his international experience as president of the International Union of Property Owners (UIPI), he noted that European property owners’ associations offer building insurance programmes to their members. POMIDA developed its own programme along similar lines, which has been operating since 2004 and offers individual insurance policies with group-based features and favourable terms. According to Paradias, the programme has contributed to the restoration of significant damage to buildings owned by insured members.

Compulsory Insurance for Apartment Buildings Under Consideration

One of POMIDA’s key proposals concerns compulsory insurance for apartment buildings. Paradias confirmed that the issue is being examined as part of the ongoing work to reform the institutional framework governing horizontal property ownership.

He noted that the regulations of many apartment buildings, particularly older ones, already require building managers to insure common areas, shared structural elements and building installations. In practice, however, these provisions are frequently not enforced, either because of indifference or because owners are reluctant to bear the associated costs.

Insurance coverage is important for the entire building, as a fire in one apartment can cause damage to neighbouring properties, communal areas and shared installations.

The POMIDA president also raised the issue of earthquake resilience, expressing concern that, in his assessment, the structural safety of buildings does not receive the same level of emphasis as energy efficiency improvements within the European policy framework.

He argued that owners of uninsured buildings face the risk of being unable to restore their properties following a major disaster, given the substantial cost of reconstruction.

Viohalco: Insurance Cannot Recover Lost Market Share

The business continuity dimension was highlighted by Ioannis-Dimitrios Papadimitriou, Deputy Chief Financial Officer of Viohalco SA. He stressed that natural disasters can cause not only physical damage but also prolonged production stoppages, affecting employees, business activity and corporate financial performance.

As he explained, insurance coverage can compensate a business for financial losses associated with an interruption to operations. It cannot, however, recover market share that may be lost while the business remains out of operation, particularly when restoring facilities takes one or two years.

He also highlighted the need to make insurance policies easier to understand, particularly for smaller businesses. The length and complexity of policy terms, combined with specialised legal and technical terminology, can make it difficult for businesses to understand the scope of coverage and the applicable exclusions.

Simplifying the presentation of insurance products, enabling comparisons between policies and providing businesses with clear information could, in his view, strengthen insurance awareness and improve risk protection.

Supply Chain Disruptions Pose Additional Risks

The resilience of suppliers is particularly important for large industrial companies. Papadimitriou explained that a significant proportion of the specialised spare parts and materials required for production are sourced from abroad, as Greece’s industrial base does not meet all relevant requirements.

Consequently, a company may escape direct damage from a natural disaster but still face serious operational difficulties if one of its critical suppliers is affected. Even when the supplier is insured and entitled to compensation, restoring its operations may take between five and eight months. During this period, production at dependent businesses could be significantly disrupted.

For this reason, risk assessments should include an examination of suppliers’ business continuity plans, their ability to transfer production to alternative facilities and the time required to resume normal operations following a flood, fire or other extreme event.

The Viohalco executive welcomed the legislative initiative introducing compulsory insurance for businesses with annual turnover exceeding €500,000, while emphasising that compliance with the insurance requirement alone is not sufficient.

Businesses must also understand the risks they face, maintain emergency response plans and be able to continue operating even when critical links in their supply chains are disrupted.

The interventions by POMIDA and Viohalco highlight two distinct but interconnected dimensions of insurance protection. For property owners, the priority is ensuring that their assets can be restored following a disaster; for businesses, it is safeguarding production capacity and competitiveness.

Against a backdrop of increasing exposure to natural hazards, insurance must complement preventive measures and structured business continuity planning to ensure a more effective recovery in the aftermath of a disaster.