There are two insurance types of residential and commercial real estate in Turkey: mandatory (Dogal Afet Sigortalari Kurumu (DASK) and voluntary.
Mandatory insurance system appeared after the adoption in 1999 of the law № 587 "On compulsory insurance against earthquakes". This is valid for buildings within the territory of municipalities. To ensure the financial stability of this type of insurance Turkish Insurance Pool for Disaster mitigation (TCIP) was created, it operates under the supervision of the Treasury Department. The effectiveness of this system is that it allows, firstly, forming a long-term financial reserves to cover losses from earthquakes, and, secondly, compensating the insured event without refund to the state budget.
Mandatory insurance reimburses the costs associated with the complete or partial destruction of the earthquake and fire, collapse, explosion caused by the earthquake.
For determining the size of insurance premium the following factors are considered:
- location (in accordance with the map of seismic zones);
- type of building (steel, reinforced concrete, stone, brick or other structures);
- the total area of the property.
The average cost on mandatory earthquake insurance is €80-€130 per year (€ 0.15 per one sq.m of housing). Property owners should be also aware of the law prohibiting setting water and electricity metres without this insurance since 2012.
Currently there are 32 insurance companies operating under the TCIP.
General or voluntary insurance allows insuring the property against all risks. The amount of the insurance premium will depend on the appraised value of the housing, considering location and age of the building, type of construction, floor, if it is an apartment.
Insurance is issued in Turkish or English. For voluntary insurance you will need minimum documents: Tapu (copy), owner’s passport, the Turkish personal tax number.