Insurers alert over string of factory fires

Published 07.09.2018 20:56

A string of factory fires across Turkey has given rise to speculation that factory owners are deliberately setting them on fire for insurance payments.

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

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 being paid for fires is more feasible for businesses with unpaid loans that drive them to bankruptcy. Even in case of sequestration, businesses indebted to banks fail to repay, as factories are sold well below their original value.

However, the owner of an insured factory is able to be paid by the insurer a large sum in case of fire, rather than meager profit from the sale.

İrfan Uzun, head of the Turkish Association of Insurance Agents, says factories pay a rather low premium, for example, to insure a factory worth TL 1 million ($155,200) and laws allow them to be paid back in the original value.

"Manufacturers seek money from insurance companies when their business falters but companies are aware of this and try to not allow them," he said. Uzun said current clients owning factories will have no problem, but insurance agents stopped insuring new clients and clients who wanted to resume paying premiums after a pause. "Factories are already a risky asset to be insured by us but we have tightened controls now," he said.

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