Insurers raise home insurance premiums in Fogo over Pico do Fogo risk

An active volcano in the price of every deed

The 2014-2015 eruption knocks between 15% and 25% off the price of the most exposed homes.

Cheaper homes, but hard to insure

Several companies have stopped issuing new policies near the active volcanic edifice.

Chã das Caldeiras, the area singled out most

The caldera's population has recovered despite the uncertainty.

A market learning to live with risk

Without a binding risk map, buyers and sellers negotiate case by case.

The still-recent memory of the eruption

The 2014-2015 eruption of Pico do Fogo buried entire homes and crops in Chã das Caldeiras, an episode that remains very much alive in the island's collective memory. That precedent explains why insurers apply stricter criteria to any property located in the areas of greatest exposure to the volcanic edifice. For many residents, having lost their home once now shapes any decision about where to rebuild.

Companies pulling back from volcanic risk

Several insurers operating in Cabo Verde have opted simply to stop writing new policies in the areas closest to the volcano, referring customers to the few companies still willing to take on that risk. This gradual withdrawal reduces the competition available and pushes premiums even higher for those who do manage to secure cover. Local insurance brokers warn that the trend could worsen if there is renewed eruptive activity.

Chã das Caldeiras, caught between risk and rootedness

Despite being evacuated and partly destroyed during the last eruption, Chã das Caldeiras' population has grown again in the years since, sustained by volcanic vineyard farming and a growing nature-tourism trade. Many families rebuilt their homes on the same spot, despite warnings about the risk. Experts consulted say this attachment is understandable given the community's historic and economic ties to that specific land.

The lack of a binding risk map

The absence of an official, binding volcanic risk map forces buyers, sellers and insurers to negotiate each deal individually, without any consistent benchmark. Risk management experts believe an updated official map would make both property valuation and insurance underwriting easier. Until that tool exists, Fogo's market will keep operating with a high degree of technical uncertainty.