A senior economist at the World Bank's Global Facility for Disaster Reduction and Recovery, Apurva Sanghi, suggested that a disaster insurance policy for the country would help reduce the economic cost of a major catastrophe, citing the example of the Caribbean region, “that’s a very successful example from the developing part of the world for countries having purchased insurance,” he said on Thursday, reports Esther Samboh for The Jakarta Post.
Bambang Brodjonegoro, fiscal policy acting chief stated that the government has allocated a total of Rp 4 trillion (US$460 million) from this year’s state budget for the disaster management fund. “But that’s not enough,” he said. “If we used Rp 1 trillion to buy insurance, for example, the benefits we could have might reach dozens of trillions. The disaster insurance funds would be disbursed to disaster-prone areas and there would be a maximum limit of allocated funds if a natural disaster occurred, he said.
“Just like health insurance, if you are sick the medical costs will be covered by the insurance firm depending on the contract.”