Property Insurance in Turkey

Turkey is one of the most sought-after resort countries for purchasing real estate. However, as with any significant financial investment, it is important to ensure the insurance of your real estate property. This topic is particularly relevant for foreign investors who mostly reside outside of Turkey.

In this article, we will discuss in detail the insurance of Turkish real estate against earthquakes and related natural disasters.

Why Property Insurance is Necessary in Turkey?

Earthquakes in Turkey are not uncommon, as part of the country is located at the junction of tectonic plates, where there is high seismic activity.

One of the most severe earthquakes in Turkey occurred in Izmit in 1999. The magnitude of the earthquake was 7.4, resulting in the deaths of around 17,000 people and the destruction of tens of thousands of residential and non-residential buildings.

Another strong earthquake occurred on February 6 in Kahramanmaras, on the border with Syria. Its magnitude was 7.8 on the Richter scale. The disaster claimed the lives of more than 42,000 people, tens of thousands were injured, and in some cities, almost all homes and infrastructure were destroyed.

Undoubtedly, such geological features of Turkey's location could not but influence the country's legislation to increase the safety of citizens' lives and mitigate the financial damage caused by natural disasters.

The government has developed regulations and rules regarding the seismic resistance of structures and the technologies of their construction, as well as earthquake insurance. Today, the majority of Turkish citizens purchase insurance policies to protect themselves and their property.

The TCIP Program

The Turkish Catastrophe Insurance Pool (TCIP) is a specially designed government program aimed at protecting private property from damage caused by earthquakes and their consequences (such as floods, tsunamis, landslides, etc.).

This project was organized in Turkey with the support of the World Bank to develop a special insurance program for managing financial risks of catastrophes at the national level, mitigating the consequences of natural disasters, and preparing for emergencies. As a result of joint efforts, on December 27, 1999, Law No. 587 "On Mandatory Earthquake Insurance" was developed and implemented, providing all grounds for the creation of the Turkish Insurance Pool.

According to the terms of the TCIP program, coverage for earthquakes in Turkey includes damages caused to buildings and their main parts and structures—walls, roofs, windows, etc. TCIP also covers the costs of evacuation from the disaster area and temporary accommodation if emergency relocation is required.

An undeniable advantage of the TCIP program is the affordable prices for service packages. Property owners have the right to choose the coverage that suits their building type and the level of risk of natural disasters.

All owners of residential and commercial real estate in Turkey are required to obtain TCIP insurance. In some regions where private insurance companies do not insure property against catastrophes, state insurance is simply necessary.

In practice, insuring an apartment through the TCIP program is very common in Turkey and is considered the most reliable and successful option among similar programs in other countries.

Types of Property Insurance

In Turkey, as in most developed countries, insurance can be mandatory or voluntary:

• Mandatory insurance against earthquakes must be obtained at the time of purchasing property. Without a policy, the owner will not be able to enter into contracts for utility services.
• Voluntary insurance allows the owner to maximize protection of their property by expanding the list of insured events, for which monetary compensation is paid upon occurrence.

Voluntary insurance covers all risks associated with natural disasters, theft, arson, i.e., damage to property by third parties. The insurance client has the right to insure not only their home but also all property inside it: furniture, appliances, antiques, art objects, and other valuable items.

What is DASK Insurance

In Turkey, mandatory property insurance is called DASK.

DASK ("Doğal Afet Sigortaları Kurumu", "Turkish Natural Catastrophe Insurance Pool") is compulsory state insurance for housing, covering material damage caused to buildings by earthquakes, including in cases of partial or complete destruction. The program provisions imply compensation to the owner for renovation and repair of the housing.

To understand what DASK is in Turkey in detail, let's consider the insurance cases covered by the policy.

DASK Insurance covers the following types of damage to real estate:

1. Structural defects of the foundation, damage to walls, floors, ceilings, roof, stairs, and some other parts of the house caused directly by earthquakes.
2. Consequential damages that often occur as a result of earthquakes such as fires, landslides, tsunamis, and explosions.When paying compensation, insurers rely on market prices for similar real estate, determined at the current date after the insured event occurs.

Today, DASK is considered the most successful government insurance system in the world.

Cost of Property Insurance

The cost of DASK in Turkey is determined based on several factors:

• Type of building: When determining the insurance coverage, the materials and technologies used in the construction of the building are taken into account.
• Location of the property: The cost of DASK varies in different provinces of Turkey, taking into account the seismic activity of each region. For example, in Istanbul, prices are higher due to increased earthquake risks compared to places like Alanya, where seismic activity is minimal.
• Area of the property: Not only the square footage but also the number of floors in the building are considered.
• Year of construction: Insurance rates significantly differ between new and old buildings.

The property insurance program against earthquakes offers several tariffs according to the technical parameters of the property. For instance, if the property is located in an area prone to earthquakes and does not fully meet the characteristics of earthquake-resistant buildings, the cost of insurance may be higher than for properties in other regions.

Annually, the rates are re-evaluated based on construction costs and other risk assessments. To obtain an accurate calculation of the insurance policy cost, one can use the online calculator on the official DASK website or inquire about the amount directly from the insurance company.

On average, the price of a DASK policy is around €50-150 per year. The standard duration of the insurance policy is one year with the option for renewal.

Issuance of DASK Insurance

Both property owners and tenants have the right to obtain DASK insurance.

To obtain earthquake insurance, the following documents are required:

• Title deed (TAPU) for property owners.
• Copy of passport.
• Turkish individual tax identification number (TIN).
• Detailed information about the insured property (area, construction date, type of 5.building materials, number of floors, construction technologies).
• Exact and full address of the property.

Step-by-step Procedure for Obtaining DASK:

1. Prepare information and documents as per the list provided.
2. Choose and visit an insurance company. DASK can be arranged through an insurance company or at one of the banks in Turkey. Additionally, it's possible to obtain DASK online through the website.
3. Calculation and payment of the premium. The cost of the earthquake insurance policy is determined based on the characteristics of the property, and the relevant documents are signed.

Renewal of Insurance

It is recommended to start the renewal process of DASK insurance before the expiration of the current policy, for example, 30 days in advance. This ensures continuous insurance coverage.

Renewal, like issuance, can be done through the insurance company or bank where you initially obtained the DASK policy. Some companies offer online renewal services.

Clients who renew their DASK insurance without interruptions for an extended period may receive discounts.

Exclusions from DASK Coverage

The compulsory state insurance DASK has certain limitations. For example, the policy does not cover compensation for:

Exclusions from DASK Coverage:

• Damage to furniture, appliances, personal belongings, and valuables.
• Cleaning of the area and waste removal.
• Expenses incurred due to lost rent, work, or relocation to another accommodation.
• Landscaping work on the site where the building is located.
• Injuries, disabilities, death.

We advise taking a responsible approach to studying all the conditions provided by the state DASK insurance.

How to Claim Compensation in Case of Earthquake Damage:

If an insured event occurs, the property owner should immediately notify the relevant organization. The corresponding claim must be submitted within 15 days. If possible, the claim should be supplemented with photographs and videos.

If a document is lost due to a natural disaster, it can be restored after confirming identity and place of residence.

The insurance company will organize an inspection and assessment of the damage, a protocol will be drawn up, and then insurance compensation will be calculated and paid according to the terms of the current coverage.

For reference:

The period for processing applications and disbursing compensation for the damage is 2–6 months.

It's worth noting that under the mandatory DASK insurance, the maximum coverage amount provided to residential homes in 2023 was 640,000 ₺. However, starting from January 1, 2024, the compensation amount for damage from natural disasters was increased to 1,272,000 ₺, nearly doubling compared to the previous year.

The Turkish authorities, considering the high seismic activity in certain regions, annually enhance systems for warning of natural disaster threats and the system for insuring citizens' real estate. Given the recent significant destructive earthquake, requirements for the quality of construction of residential buildings are being significantly tightened.

At the same time, there are seismic-safe regions within the territory of the Republic of Turkey, such as Alanya, where the risks of earthquakes are minimal.

If you're planning to purchase apartments in Turkey and have questions regarding the state DASK insurance, feel free to contact Altop Real Estate agency. Our specialists are available 24/7.

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