This guide covers the types of home insurance in Turkey, how to get it, who to get it from and how to claim on Turkish home insurance – as well as the basics of contents insurance.
Is home insurance in Turkey obligatory?
Homes must be insured against earthquakes, but private home insurance is otherwise rare amongst Turkish people, unless they took a mortgage when they purchased the property: in which case the bank is likely to insist on insurance. In fact, fewer than half the homes in Turkey are insured.
What types of home insurance are available in Turkey?
There is a lot of choice.
Strangely, for a country that insists you use a Turkish insurance company to insure your car, you may insure your home (and its contents) with any insurance company that takes your fancy and is prepared to take on a property in Turkey.
There are a number of international companies that offer to insure properties in most popular destinations in the world and there are local Turkish companies offering to insure your property in Turkey.
The types of insurance they will offer you can be very different.
The international companies tend to offer less complicated policies with fewer things for you to trip over when you’re applying for the insurance or making a claim.
Most international companies will offer three types of insurance:
- Insurance for when the property is your main residence.
- Insurance for holiday homes that are not let (rented out).
- Insurance for homes that are rented out for all or part of the year.
Insurance companies based in Turkey tend to take a different approach, offering you a menu of insurance items from which you can choose and, for several of those items, different amounts for which you can insure.
For example, in Turkey there is usually only one home insurance policy to which you can add extra insurance if your property is going to be vacant for more than a certain number of days each year (with a different premium depending on whether it will be empty for – say – 30, 90 or 180 days per year). They will also offer you insurance, at an additional cost, if you are going to let (rent out) your property for part of the year.
How much should I insure the building for?
Many people think that if their house is worth €300,000, they should insure it for €300,000. This is wrong.
Under the insurance law in Turkey (and that in many other countries), the amount you should insure for is the cost of rebuilding the property.
In some cases, this can be less than the value of the property. After all, you will still own the land and that might be worth 30% or more of the value of the building.
However, in other cases the cost of rebuilding (including the cost of any demolition and clearing the rubble from the site), can be far higher than the value of the building. This is particularly true if you own an older ‘character’ property. For example, I live in a 16th century building. Where and at what cost would I find 16th century beams, doors etc. to replace those that were destroyed and where would I find the workmen skilled in the construction methods needed to rebuild such a building?
What is the cost of rebuilding your property? This can be difficult to assess. This is strange when you consider the fact that everybody needs to do this to arrange insurance.
Fortunately, there are some websites – but none based in Turkey – that will help you estimate the cost of rebuilding a typical property of a typical type.
For example, specialising in UK property, the Building Cost Information Service, a part of the Royal Institution of Chartered Surveyors (RICS) and working at the request of the Association of British Insurers (ABI) provides a very detailed website allowing you to estimate the cost of rebuilding properties of different types, different sizes and located in different places.
Similar sites exist in many other countries around the world. They may give you some idea of the cost of rebuilding your property in Turkey.
What is covered by the average Turkish house insurance policy?
You will need to check your proposed policy to see what is actually covered. They often vary considerably.
Reading insurance policies can be complicated and it’s certainly not much fun. This is one reason why simpler policies tend to be favoured.
Typical cover includes:
Insuring a permanent residence
- Full insurance for damage by wind, flood, fire, impact etc.
- Damage by explosion
- Escape of waterfrom tanks or appliances within the building
- Escape of oil from any oil-fired heating system
- Damage caused by riots or people acting maliciously
- Damage caused by falling trees, lamp-posts etc.
- Full insurance against theft from your property
- Alternative accommodation cover if your property becomes uninhabitable
- Cover for architectural and other professional fees if repair work is necessary
- Damage caused by infestation
- Damage caused by subsidence
Things to look out for
- Does it cover your swimming pool? Surprisingly, some policies do not.
- Is there any limit to the value of the items covered in respect to theft? Most home insurancepolicies will only include the theft of items such as your hot water cylinder, your cabling etc. Some impose a financial limit on the value of such items.
- Does the policy offer public liability insurance (see below)? If it does not, you will probably need to take out additional insurance.
- Does the cover include employer’s liability insurance (see below)? If it does not, you will probably need to take out additional insurance.
- Is there a high excess (the amount you need to pay yourself before you can make a claim)? In some cases, this can be expressed as a percentage of the claim rather than a fixed amount and this could amount to a lot of money.
- Does the insurer require special security arrangements: burglar alarms, cameras etc? Some will require these only if the content insured exceed a certain amount.
Insuring a holiday home in Turkey
You will require all the insurance you would require for your permanent residence but, in addition, the insurance policy should provide cover for periods when the property is empty.
Things to look out for
- How long can the property be empty before cover ceases? In some cases, this period can be as short as 30 days. Other companies do not impose any restriction.
- Are you required to use special security procedures when the home is empty?
Insuring a holiday home in Turkey – when it’s also rented out
In addition to the insurance that you will need for a holiday home, you will need cover for damage caused by your tenants if you rent the property out during part of the year.
You will probably also want cover for theft by your tenants.
You may also want a special clause insuring you against claims by your tenants (for example, if they cannot stay in the property because it is infested by cockroaches or if they trip over something and injure themselves). Although some claims by your tenants might be covered by ordinary public liability insurance, it is better to have the position made clear in your policy.
Things to look out for
- Does the policy cover you for loss of rental income?
- Does the policy cover your valuable items such as jewellery?
- Do different excesses apply if tenants are in the property?
Is a Turkish insurer or a foreign insurer better?
For most people, the first thing they think about when deciding which insurer to use is the cost of the policy.
This is not the right approach.
You need to think carefully about the extent of the cover being offered. This means reading the policy documents or (and this is increasingly difficult in the age of the internet) finding an experienced insurance broker to advise you as to the best overall deal in your circumstances.
Saving €50 on the cost of your policy is no good if it dramatically reduces the cover provided.
The next thing to be thinking about is how good the company is when it comes to paying out on a claim. Some of the companies have a very poor record. This applies, particularly, to some of the cheaper companies.
A Google search on the name of the company plus “problems” may produce interesting results!
Once again, there is no point in saving €100 on your premium if the company constantly quibbles and treats paying out as an optional extra.
The next major issue for most people should be language. Unless you speak fluent Turkish – and technical, legal Turkish to boot – you will find it very difficult to understand policies and claim forms written in Turkish. It is therefore worth paying a little extra to an insurance company that provides documentation in your own language and a claims department that can operate in your own language.
Finally, if something goes wrong and you get into a dispute with your insurance company, would you be happier dealing with that dispute ‘back home’ or in Turkey? If you deal with an insurance company based in your home country, or with many international insurance companies, you will find that the law of that country governs the policy – not the law of Turkey.
Overall, our preference is to deal with insurance companies (good, experienced insurance companies) based in your home country or, failing that, operating internationally, and speaking your language. They will probably cost you a little bit more than a local Turkish company but, in the unfortunate event that you have to make a claim, you will probably think the extra cost well worthwhile.
Can my mortgage lender insist I use their insurance?
No. This is illegal.
They can insist that the property is properly insured.
They can offer you insurance, but they cannot force you to take it.
Most insurance offered via banks is uncompetitive.
What sort of cover is needed?
This will depend upon how you intend to use the property.
If, like many people, you are going to live in Turkey but intend to be away for large parts of the year visiting friends and relatives, you will probably find that holiday home insurance suits your requirements better than permanent residence insurance.
If you are thinking of renting out the property at all then you need insurance that permits this and covers you during the periods when tenants are in the property. This is not necessary if you allow friends and relatives to stay in the property without charge, but any payment (whether in cash or otherwise) can invalidate the insurance unless you take this special type of insurance.
What if the home is in a block of apartments?
Under Turkish law, if your home is in a ‘community of owners’ – if it is part of a block of apartments or part of a group of buildings that share common facilities such as swimming pools, tennis courts etc. – the administrators of the community must insure the buildings. However, the law only requires them to insure the ‘common parts’ of the property: the bits such as the corridors and lifts that all the owners can use.
Exactly what these are depends upon the legal structure of your community but, in the case of a block of apartments, it is likely only to be the roof, the shared walls, the car park, the gardens, the pool etc. This leaves the rest of your home – the bit within the outer walls of your apartment, uninsured.
Some (but few) communities take it upon themselves to arrange full building insurance for all the properties in the community. You need to check whether this is so in your case and, if it is, the scope of the insurance that has been arranged.
Of course, if they arrange such insurance, the cost is shared by all the owners in the community and forms part of your community fees.
On the face of it, having the administrators of the community arrange the insurance sounds like quite a good idea. In practice, it can be very wasteful. If almost everybody in the community is a permanent resident but you are using your home as a holiday home or to rent out, you will probably find that the insurance that has been arranged is inadequate. You will then have to either find a company that will provide top-up insurance (almost impossible) or take out a fresh policy to give you what you need. This means, of course, that your share of the cost of the community’s policy is largely wasted.