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INSURANCE

Losses from disasters decline in 2013: Swiss Re

Natural and man-made disasters caused $140 billion of damage worldwide last year, according to a study released on Wednesday by Zurich-based reinsurance group Swiss Re.

Losses from disasters decline in 2013: Swiss Re
Swiss Re headquarters in Zurich. Photo: Swiss Re

In its annual survey of disaster damage, Swiss Re noted that the loss total was down from the $196 billion recorded in 2012, the year that Hurricane Sandy battered the United States.
   
Of the $140 billion recorded in 2013, insured losses accounted for $45 billion.
   
The most expensive disaster for insurers was the massive flooding in central and eastern Europe in May and June last year, with Germany, the Czech Republic, Hungary and Poland hardest hit.
   
Total economic losses in the floods hit $16.5 billion, of which $4.1 billion was covered by insurers.
   
In July, parts of France and Germany were struck by severe hailstorms, causing economic losses of $4.8 billion.
   
The damage in Germany alone generated most of the entire insured loss of $3.8 billion — the largest ever figure for a hailstorm worldwide, Swiss Re said.
   
Floods in Canada in June caused losses of $4.7 billion, of which $1.9 billion was insured.
   
The next costliest disaster for the insurance sector was the wave of thunderstorms and tornadoes in the United States — including a freak twister in Oklahoma — which left insured losses of $1.8 billion and inflicted $3.0 billion in overall economic damage.

Poor nations bear the brunt 

While rich countries saw the most expensive single disasters in terms of insurance claims — the norm, given their wealthier economies and extensive insurance penetration — it was the developing world that continued to bear the brunt of lives lost and overall economic damage.

The vast majority of the 26,000 disaster deaths last year — up from 14,000 in 2012 — were in developing nations.

Asia, where like other poor regions only a small percentage of the population has insurance, was hardest hit.

Typhoon Haiyan in the Philippines in November brought some of the strongest winds ever recorded, coupled with heavy rains and storm surges.

Some 7,500 died or went missing, and over four million were left homeless.

Haiyan inflicted $12.5 billion in economic damage, of which insured losses represented just $1.5 billion, Swiss Re said.

The second biggest humanitarian disaster was the June flooding in India, which claimed 6,000 lives. It did not make it into Swiss Re's top ten table of economic losses and insured damage.

Thousands of lives were saved when Cyclone Phailin made landfall in India in October, Swiss Re underlined, hailing the country's effective risk reduction programme which included a pre-planned evacuation drive.

But with Phailin destroying some 100,000 homes and more than 1.3 million hectares of farmland, total economic losses were $4.5 billion, of which just a tiny proportion was insured.
   
Swiss Re said the insurance industry needed to rethink how it could help the wider world deal with the fallout of disasters.
   
"The protection gap, the difference between total losses and insured losses, has progressively widened over the last 40 years," it said.
   
"Disaster events continue to generate increasingly total losses alongside ongoing economic development, population growth and urbanization," it added.
   
It also echoed concerns that climate change driven by emissions of heat-trapping greenhouse gases was expected to lead to more frequent and severe extreme weather.

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INSURANCE

EXPLAINED: Why you need ‘legal protection insurance’ in Switzerland

Swiss insurance companies offer a variety of services, but the one covering legal disputes is among the most popular ones. This is what you should know about it.

EXPLAINED: Why you need 'legal protection insurance' in Switzerland
Law and order: Legal insurance may make it easier. Photo by Sora Shimazaki from Pexels

The Swiss like to be prepared for all kinds of disasters — both real and imaginary.

This is where insurance comes in.

Whether it’s a policy that covers damages inflicted on cars by weasels, or insurance for theft of sleds and skis placed outside a mountain restaurant, people here don’t like to leave anything to chance.

One of the most popular optional coverages — as opposed the health insurance, which is compulsory — is legal protection insurance (Rechtsschutzversicherungen in German, protection juridique in French, and protezione giuridica in Italian).

What is it and what does it cover?

Simply put, it covers attorney and other associated fees if you undertake court action against someone, are sued, or simply need legal advice.

There are two different types of legal protection insurance — one specifically for traffic accidents and the other for all other matters. Sometimes they are combined.

Typically, this insurance covers costs of legal representation associated with contract disputes, employment, loans and debts, healthcare, housing, retail purchases, and travel.

Photo by Rodnae Productions from Pexels

Some carriers also insure cases related to marital law and inheritance.

Most will not cover attorney fees for criminal cases where you are the perpetrator, or financial disputes related to asset management, banking and investment.

Also excluded is legal action related to political or religious activism.

Can you choose your own lawyer or will you have one assigned to you by the insurance company?

Typically, an insurer has a roster of approved attorneys with whom it works. Some allow the client to choose from the list, while  others select one for you.

If your own lawyer is part of your insurer’s roster, you can request he or she represents you, but it is not guaranteed.

How much does this insurance cost?

Fees vary depending on what coverage you need (traffic accidents, general, or combined), whether they have deductibles, and how high they are.

You can compare the premiums by using this link.

Do you actually need this coverage?

As is the case with any optional insurance, you don’t need it until you do.

Generally speaking, and according to online consumer comparison site Moneyland.ch, “if you require legal consultation at least once every two years, getting personal legal insurance often makes financial sense. Just the legal consultation benefits which you get with some insurance policies can make up for the cost of premiums”.

READ MORE: How much does health insurance cost in Switzerland?

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