News MiddleEast09 Sep 2018

Turkey:String of fires turns insurers more cautious

09 Sep 2018

Insurance companies are being more vigilant over fire claims and have partially suspended accepting factory owners as their clients.

A string of factory fires across Turkey has given rise to speculation that arson was involved in several of the factory fires in a bid to receive insurance payouts, reports Daily Sabah.

Since January, nearly 100 factories have burned across the country and although causes vary, it is widely speculated on social media and by media outlets that the owners of factories on the brink of bankruptcy deliberately started fires to claim insurance money.

The Turkish Association of Insurance Agents is seeking data from its members to compare figures related to factory fires in a bid to thwart payment for suspicious fires.

Insurers say that it is more viable for factory owners to be paid for fire insurance claims than to declare bankruptcy over unpaid loans. Even in cases of sequestration, businesses indebted to banks fail to repay in full, as factories are sold well below their original value.

Mr Irfan Uzun, head of the Turkish Association of Insurance Agents, says factories pay a rather low amount of premium to insure a factory worth, say, TRY1m ($156,000), and laws allow them to be compensated the original value.

"Manufacturers seek money from insurance companies when their business falters, but insurers are aware of this and try to not allow them," he said.

Mr Uzun said that existing clients owning factories will have no problem, but insurance agents have stopped accepting new clients as well as clients who wanted to resume paying premiums after halting payments for some time. 

 

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