Against Backdrop of Accidents Premiums Rise on Compulsory Insurance of Real Estate

The Bureau of Compulsory Insurance (BCI) in the framework of compulsory insurance of real estate collected a total of 21,493,860 manats by October 1 (+ 73.9% in the first three quarters of last year). The activity is linked to the increasing incidence of natural disasters like the earthquake in the north-western region of Azerbaijan.

The information on the BCI site noted that all insurers in this segment concluded 83,406 contracts (minus 31.6%). The discrepancy between the amount of the increase and decrease in the number of policies sold is due to the priority of insurance of property in the capital, whose rates are higher than in the regions.

Compulsory insurance of real estate applies to all types of buildings, including houses and apartments belonging to individuals, offices, legal entities, and state property.

The maximum amount of compensation for an insured event in the country is legislated for Baku - 25,000 manats, in Ganja, Sumgayit and Nakhchivan - 20,000 manats, and in other towns - 15,000 manats. The insurance rate for this type of insurance is 0.2% of the specified amount.

Recent cases of the earthquake in Sheki and surrounding areas indicate that insurers use legal and other levers, trying not to pay the full amount to cover losses of property owners, but only part of it.

The licenses for the provision of compulsory insurance of property belong to 12 of the 15 members of the BCI. --17D-