The recent flooding is a further setback for insurance companies which had to pay about SR500 million in compensation following floods that hit eastern Jeddah on Nov. 25, 2009, said Dr. Omar Hafez, chairman of the National Insurance Committee at the Council of Saudi Chambers of Commerce and Industry. He added that insurance companies incurred huge losses following the Nov. 25 floods.“After learning good lessons from this, these companies are now hesitant to insure properties and assets, including factories and shops, that are situated in flood vulnerable areas of the city,” he said.He also drew attention to the fact that one insurance company had to pay about SR20 million in compensation to a single factory after it suffered losses in the Nov. 25 flooding.Hafez said insurance companies are now unwilling to insure all public properties after incurring huge losses in floods in Jeddah and Riyadh over the last two years.“Most public and private properties and assets, including commercial showrooms and shops, are not insured in the Kingdom. Only cars have full cover,” he added.“Claims are being submitted for factories, carpet shops and commercial showrooms. The number of claims will increase over the coming days as more factory owners and shop owners complete procedures to submit claims,” he said.Over 5,000 vehicles were damaged during the Jan. 26 floods; most of these vehicles did not have proper insurance documents. Hafez said lack of proper understanding among people about the possibility of risks and the importance of being insured has resulted in some insurance companies closing down. The industry has been worth SR15 billion over the last two years.Hafez stressed the need to expand mandatory insurance coverage, which is currently only restricted to vehicles and people’s medical health, to other areas.“There should be efforts to improve awareness among citizens to insure their properties -- such as local factories and commercial shops for which they invest millions of riyals -- against the risks of natural disasters such as flooding,” said Hafez, adding that local insurance companies are planning to insure government projects.