Home Buyers Benefit from Commercial Housing Insurance

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Last updated at: (Beijing Time) Monday, November 25, 2002

Home Buyers Benefit from Commercial Housing Insurance

New home buyers in China are being offered better protection against substandard construction as more developers take out quality insurance.

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New home buyers in China are being offered better protection against substandard construction as more developers take out quality insurance.

A mark of China's maturing housing market, housing quality assurance is being promoted by the Ministry of Construction (MOC) to give new home buyers peace of mind.

The People's Insurance Company of China (PICC), the country's largest insurance firm, has cooperated with the MOC to launch the new service and on Sunday signed contracts with two more real estate companies, one from Beijing and the other from Xi'an.

Targeting all housing programs that meet MOC housing quality standards, the new insurance will cover any damage caused by the quality problems over a ten-year period.

The insurance premiums will be paid by the developers, but the beneficiaries are the house buyers. The new program is a step towards regulating the housing market.

Tong Yuezhong, vice-director of the MOC housing industrialization promotion center, said the introduction of housing quality insurance will reduce the risks to buyers, providethem long-term assurance, and help improve housing quality with the double supervision of the government and the insurance sector.

PICC administrative vice-director Wang He said housing quality insurance was an internationally accepted practice to assure quality and to protect purchasers'interests. Insurance was even compulsory in some countries, such as Italy, Finland and Spain.

Insurance could reduce the financial risks in housing, a point borne out not only by overseas experiences, but also by the demandin China's housing market, said Wang.

President of Beijing Jiahong Real Estate Development Co., Ltd. Huang Jiankun voiced his belief that there had to be a large market in China and the new insurance program would encourage a surge in house sales.

PICC, which has about 74 percent of the property insurance market in China, is the first firm in China to offer the new insurance program.

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