Harsh critics of the proposed changes to the mandatory home insurance after the tragedy in the Rahova district of Bucharest: Then change the name of the law!

The legislative council issued a negative opinion on Thursday, January 15, calling for a “total reconsideration” of the bill proposing that the risk of accidental gas explosion be covered by mandatory home insurance. The act, initiated last month by more than 100 parliamentarians from all parties, was motivated by repeated gas explosions that affect people's homes and lives, the most recent examples being in Rahova and Buftea.

• The opinion of the Legislative Council is mandatory for the adoption of any law, but it has only an advisory role.

Homeowners in Romania are required by law to insure their homes against three risks of natural disasters: earthquakes, floods and landslides.

The insurance costs 50 lei per year for adobe houses, for which you can receive a maximum of 50,000 lei in the event of a disaster, respectively 130 lei per year for more resistant houses, and based on the insurance you can receive a maximum of 100,000 lei compensation if the home is destroyed.

Owners who do not have this insurance, called PAD (acronym for Natural Disaster Insurance Policy) risk fines between 100 and 500 lei, but only last year were the first fines issued in more than 15 years since this has been possible.

Changes proposed after the explosions in Rahova and Buftea

In mid-December last year, more than 100 deputies and senators from all parties proposed to supplement law 260/2008 on compulsory home insurance (PAD) so that the risk of accidental gas explosion is covered by this compulsory policy.

The draft law was submitted on December 22 to the Senate, as the first chamber notified. The decision-making chamber, however, will be the Chamber of Deputies.

In justifying this proposal, the initiators emphasized that “Romania is facing repeated and severe gas explosions that affect homes and endanger people's lives.”

As recent examples are mentioned:

– Rahova, Bucharest (2025) – 3 dead, dozens injured, apartments completely destroyed.

– Buftea (2025) – strong explosion, 2 seriously injured, partial collapse of the building structure.

– Chitila (2024), Iași (2024), Hunedoara (2023), Sighetu Marmații (2022) – homes destroyed, families left homeless.

“Although PAD is mandatory, standard coverage mainly covers earthquake, flood and landslide. In the event of an accidental gas explosion, families may be left homeless and without the possibility of compensation. The explicit inclusion of this risk ensures uniform and predictable treatment,” the statement of reasons states.

The initiators claim that the actuarial impact would be reduced because “the probability of events is low, so the inclusion of risks does not create significant pressure on premiums or indemnity funds, while the social benefit is substantial”.

Belgium, Spain and Germany, given as an example

In the project, examples are given of the situations in Belgium, where home insurances must include fire and explosion, as well as Spain and Germany, where multi-risk policies include explosion as standard coverage.

“In all three analyzed European states, the explosion is covered by standard housing policies. In Romania, this risk – frequent and devastating – is not covered by PAD”.

What is different in Romania?

What the initiators of this bill do not say is that Romania is the only country in the EU that has a specific law that obliges all home owners to have minimum insurance against three risks of natural disasters: earthquakes, floods and landslides.

In the rest of Europe, including the three countries given as an example in the draft law, the model is different: insurance becomes mandatory through commercial contracts (loans) or for tenants to cover possible damage to the owner's home (eg fire, flood).

In Romania, these risks are covered by optional home insurance.

Criticisms of the Legislative Council

The legislative council criticizes in very harsh terms all the content of this draft law, in the negative opinion issued on Thursday, January 15, warning that “no information is presented regarding the financial impact on the general consolidated budget, the impact on the legal system, the compatibility with the European Union regulations on the matter, nor regarding the consultations carried out in order to develop this proposal”.

The legislative council also says that “no information is presented regarding the number of people who could be the subject of this legislative proposal, nor are all the envisaged legislative solutions argued.”

The legislative council points out that law 260/2008 aims at compulsory home insurance only against risks of natural disasters.

“The inclusion of the risk of accidental explosion in the category of risks covered by the mandatory home insurance, which targets the risks generated by natural disasters, is likely to affect the general conception of the basic act”, warns the Legislative Council.

In this case, it would have been necessary to change the very title of the law, so as to include the legal assumption of the risk of accidental explosion.

“The principle of social solidarity”

The Legislative Council recalls the reasons for the introduction of compulsory insurance against earthquakes, floods and landslides, as presented in Law 260/2008:

“Romania is one of the European states significantly exposed to natural disasters, especially earthquakes and floods, which often cause loss of human life and material damage whose economic and social costs are major. By virtue of this reality, the legislator considered it necessary to regulate a mandatory insurance mechanism, as well as the conditions for mandatory insurance of homes owned by individuals or legal entities (…). The purpose of the rules in force is to establish a mechanism, considering the principle of social solidarity, by which, in the event of natural disasters, the owners of the houses can be compensated for the damages suffered”.

The legislative council points out that “the legislation in force provides for the obligation of owners to take out PAD insurance policies against natural disasters precisely in order to have a functional and efficient system of compensation in the event of earthquakes, landslides or floods”.

Accidental explosion is not a “natural disaster”

The expression “natural disaster” is defined in the law as “a form of manifestation of the risks of earthquakes, landslides and floods as natural phenomena, which generate material damage”, so we appreciate that the accidental explosion cannot be included in that definition, as being a natural disaster, the Legislative Council also points out.

Another problem pointed out by the Legislative Council is in article 4 of the draft law, which refers to the “premium”, i.e. the price of the future insurance:

“The premium related to the inclusion of the risk of accidental explosion is established on the basis of the actuarial studies carried out by PAID and approved by the Financial Supervisory Authority (ASF)”.

The legislative council warns that this article does not correlate with the “provisions of art. 5 of the basic act, which establishes the due annual premiums for the insured sums that are granted pursuant to it and, at the same time, establishes the possibility that the compulsorily insured sum and the related mandatory premium be modified by regulations issued by the ASF”.

“As a result of the above, it is necessary for the legislative proposal to be reconsidered in its entirety, both from the point of view of the configuration of the expected legislative solutions, which must be in accordance with the legal provisions in force, and from the point of view of the expression of the solutions, in accordance with the requirements of legislative technique, clearly and precisely, unequivocally”, concludes the Legislative Council in the negative opinion.

The reaction of PAID, the company that issues these insurances

Contacted by HotNews.ro for a point of view on this draft law, PAID Romania, the company that issues the compulsory home insurance policies, stated that “it is following the course of the legislative initiative with interest and will do a detailed analysis of this proposal if it is requested by the authorities”.

Asked by HotNews.ro how relevant the situations in Belgium, Spain and Germany are, PAID Romania stated that “each country has an insurance system that takes into account international practices, but also local specifics”.

In Romania, the housing insurance system has 2 steps:

– step 1, mandatory which covers only the risks considered natural disasters with an impact on the entire country (earthquake, landslide and flood – all as a natural phenomenon) and which is limited to a coverage of 100,000 lei (respectively 50,000 lei for houses made of less resistant materials)

– step 2, optional, which is the optional home insurance policy that can supplement the value coverage up to the entire value of the home, can also cover the goods in the home or annexes, and can bring additional risks into the coverage.

“We mention that the explosion is a risk included in the basic package of any optional home insurance, a package also called FLEXA (acronym for fire, lightning, explosion, aircraft which in Romanian means fire, lightning, explosion, falling aircraft bodies)”, PAID Romania officials also stated.