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VietNamNews

Market traders shun fire insurance, despite risks

Update: March, 01/2012 - 10:10

 

A crowded market in Dong Xuan-Hang Dao Street in the Old Quarter. Market traders still have little interest in buying fire insurance, despite a recent fire that decimated a market in Quang Ngai Province. — VNA/VNS Photo Tran Viet
HA NOI — Shop owners in Ha Noi show little interest in buying fire insurance, leaving the capital's crowded markets at risk.

Traders like Hoa, who has operated a clothes kiosk in Nga Tu So Market for 17 years, claim purchasing insurance would be ‘unfeasible' and ‘unnecessary'.

"I've got billions of bills to pay. A few millions of dong in profit per month is just enough to make ends meet," she said.

Hoa admitted that fire prevention techniques in the market were weak because of a downgraded electric system and flammable products covered in raincoats, but she insisted that fires seldom occurred.

"It's been 10 years since the last fire, which destroyed several electric stalls outside," she said, adding that others shared her lack of concern.

"As far as I know, none of traders in this market buy it," she said. Nga Tu So Market is currently home to about 800 kiosks.

Figures from the municipal Fire Prevention and Fighting Police Department show that 50 of Ha Noi's 145 markets are partially equipped to combat a blaze. The rest are completely without fire-fighting tools.

Typical market conditions include messy electrical systems, flammable materials and small alleyways and fire extinguishers blocked by merchandise. Many stalls are not separated by fire-resistant walls.

Deputy head of the Nga Tu So Market Management Board Nguyen Huu Manh said fire insurance policies demanded too much from their customers, such as a certificate of fire safety from relevant authorities, a fire alarm system and a network of fire extinguishers around the market.

"No insurance company would agree to sell its product to a market with a low-quality fire protection system like ours," he said.

This situation is repeated in other provinces and cities nationwide.

President and Chief Executive Officer of AAA Assurance Corporation Do Thi Kim Lien told Binh Duong newspaper that although the company issued forcible fire and explosion insurance five years ago, traders had not realised its value and still resisted buying it.

Lien admitted that all insurance companies in Viet Nam had encountered difficulties in selling this kind of insurance. According to the Ministry of Finance's regulation, the insurance premium is based on the premium rate, the value of the goods and 10 per cent added value.

When shop owners did purchase fire and explosion insurance, she acknowledged, the amount of asset damage was difficult to inventory since their goods often lacked certificates of origin and other documents.

Currently, there is no solution that would satisfy both insurance companies and traders.

Early this month, a fierce fire broke out at Quang Ngai Wholesale Market in central Quang Ngaii Province and burned down 680 stalls worth about VND120 billion (US$5.7 million). None of the traders is reported to have bought fire insurance. — VNS

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