Mehmet Şimşek announces: Mandatory insurance affecting all homeowners is coming

Minister of Treasury and Finance Mehmet Şimşek made statements at the Earthquake-Resistant Building Design Competition Award Ceremony held at Hasan Kalyoncu University (HKÜ). Şimşek stated that work is underway on a new insurance policy.

Pointing to the importance of creating designs for earthquake-resistant buildings, Şimşek said, "Turkey is, to a large extent, an earthquake country. We have no choice but to live with earthquakes. Therefore, we must build resilient structures."

Reminding that mandatory earthquake insurance was implemented following the 1999 earthquake, Şimşek expressed that because Turkey is an earthquake country, such insurance must be obtained.

Stating that financial security is provided to the earthquake coverage pool under the Natural Disaster Insurance Institution (DASK), Şimşek said, "As of 2023, the number of mandatory earthquake insurance policies is approximately 11.7 million. The coverage amount has reached approximately 3.7 trillion liras. Although it is called mandatory insurance, the insurance rate is still low. This mandatory insurance is an important cornerstone, and we need to take additional steps on top of it," he said.

Reporting that Turkey spent over 1.1 trillion liras on earthquake-related costs last year, Şimşek continued:

"This earthquake insurance was, to some extent, useful in healing these wounds. Approximately 35 billion liras were paid out for about 500 thousand damage claims in the region. Therefore, we care about the expansion of mandatory earthquake insurance, and we want it not to be limited only to earthquakes.

We have a reform program for 2024. One of the components of this reform is to expand the scope of the existing insurance. As of now, mandatory earthquake insurance has also set an example for some countries.

In the past period, officials from countries such as Azerbaijan and Albania came to learn about this system and asked us to share our experiences. We are truly seeing an exemplary practice. Turkey is an earthquake zone; this is a fact."

MANDATORY DISASTER INSURANCE

Stating that cities resilient to climate change and the disasters it will cause are of inevitable importance, Şimşek said:

"If the climate crisis is a reality, we must prepare for it. Green transformation is also a part of this preparation. We are planning to introduce mandatory disaster insurance within this year, in the 3rd and 4th quarters of 2024.

The scope of earthquake insurance is very narrow. It only covers buildings, whereas disaster insurance will cover all other risks as well. A good reform was made in 2000, and mandatory earthquake insurance was introduced; now we need to go one step further and take climate change into account.

As a precaution against the risk of increasing the frequency of natural disasters, we are now saying, 'We will implement mandatory disaster insurance.' This regulation is also included in our 12th Development Plan. It will cover risks in all other dimensions, including household goods. Thus, our country's insurance penetration rate will increase."