Turkey tightens its rules for its mandatory earthquake insurance coverage

Turkey Insurance

Turkey InsuranceThe country’s government will be limiting services available for uninsured homeowners.

The Turkish government has just updated its law regarding its regulations for the earthquake insurance that homeowners are required to purchase, tightening it significantly, to the point where uninsured individuals will have more limited services available to them.

Starting in August 2012, homeowners who do not purchase the disaster coverage policy required by the government will also not be able to enroll in basic utilities such as gas, water, and electricity services.

This announcement was made by the president of the Turkish Catastrophe Insurance Pool, Selamet Yazici.

According to Yazici, the hope is that the measure will boost the number of policyholders within the next three years from the current 3.8 million to 10 million.

The country will be stopping people from receiving mortgages if they do not obtain this earthquake insurance, and will ban them from being able to receive state assistance to rebuild their homes should a quake damage the building, added Yazici. This law is being put into place twelve years after the coverage was originally mandated in a decree that occurred in response to a tremor that occurred in 1999 and that caused tens of thousands of people in the country to be killed.

The new law will also broaden the responsibilities of the TCIP – the name of the mandatory coverage – so that it includes other forms of disaster protection, as well. The TCIP was formed as a cooperative project between the Turkish government and the World Bank, along with the insurance industry. Its primary purposes are:

• To provide homeowners with affordable coverage against quakes
• To offer the country a way to share the risk and spread the financial burden of damage from tremors throughout the international capital and reinsurance markets
• To decrease the government’s financial burden from earthquake damage
• To allow funds to accumulate over the long term to help compensate for damages
• To boost awareness of coverage throughout the country
• To put the earthquake insurance system into place as a way to ensure that houses are well constructed.

 

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