Plan disaster insurance

A disaster insurance system should be introduced to protect corporate and household assets, says an article in People's Daily. The following is an excerpt:

After the devastating earthquake in Sichuan province, the rescue and reconstruction work needs strong support from different sides. Insurance has also played an important role. Many primary and secondary school students who were injured or lost their lives in the quake bought life insurance designed especially for students before the quake. So they will be compensated by the insurance companies. The 24-hour hotline of the insurance companies and the fast track compensation procedure will help deliver the compensation to the families of the victims as soon as possible. Each compensation is not only a psychological comfort for the living ones, but also provides necessary physical guarantee for their future life.

However, the pity is that most of the insurance compensations belong to life insurance. Currently, earthquake is not viewed as a type of property insurance, so few household and corporate assets such as houses and vehicles destroyed by the quake can get compensated. The main reason is that our insurance industry is in the early stages of development and the commercial insurance companies usually are small-sized and weak. The compensation due to a quake usually goes beyond the capacity of insurance companies, and thus, they cannot shoulder such a huge insurance compensation. Even in some advanced countries, commercial insurers usually do not provide insurance for severe natural disasters, including earthquakes.