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       Building Completion Insurance Enters the Medium-Term Program for the First Time

       Ahmet Yaşar, the President of Maher Holding Insurance Group,
       stated that building completion insurance will be promoted
       according to the Medium-Term Program covering the period
       from 2024 to 2026. He expressed satisfaction with the inclusion
       of building completion insurance in the Medium-Term Program,
       especially in terms of disaster preparedness. Yaşar emphasized
       that certain regulations are needed to expand the implementation
       of building completion insurance.
       The Medium-Term Program (MTP) covering the period from
       2024  to  2026  now  includes  building  completion  insurance.
       According  to  the  program,  efforts  will  be  made  to  promote
       the widespread adoption of building completion insurance.
       To enhance construction quality, the insurance will take on a
       self-regulatory role, and professional liability insurance for  is also of critical importance in the urban renewal process and
       individuals and organizations involved in the construction  made the following comments on this matter:
       inspection process, as well as construction contractors’ liability
       insurance, will be expanded.                          “In  our  country,  the  land  share  commonly  used  in  urban
                                                             renewal projects places the risk on landowners in joint venture
       Ahmet Yaşar, the President of Maher Holding Insurance Group,  construction contracts. Contractors and financial institutions
       shared his thoughts on the matter. He expressed satisfaction  typically  carry  lower  risks.  Sometimes,  landowners,  driven  by
       with the inclusion of building completion insurance in the MTP,  the desire for higher returns, may increase their risks. However,
       particularly in the context of disaster preparedness.  it’s important to note that landowners involved in urban renewal
                                                             projects in our country generally come from income groups that
       It Will Be at the Liability Insurance Company         are not particularly high, and they need protection in terms of
                                                             the risks they carry and potential losses they might incur if those
       Yaşar  emphasized  that  the  concepts  of  construction  and  risks  materialize.  To  control  these  risks  and  handle  potential
       insurance cannot be separated from each other. He highlighted  losses, insurance companies and building completion insurances
       that building completion insurance is of critical importance both  are the most realistic tools. Urban renewal projects that do not
       in earthquake-resistant housing construction and urban renewal,  involve insurance companies in our country could create systemic
       stating the following: “One of the biggest risks when buying a  risks.”
       property from a project or becoming a homeowner through land-
       for-housing agreements is the potential failure of the building or  Regulation Is Necessary
       project to be completed. To alleviate such concerns, it’s advisable
       to  request  building  completion  insurance  from  the  contractor  Yaşar pointed out that building completion insurance has been in
       before proceeding with the purchase. This insurance ensures that  practice since 2018 but emphasized that there have been some
       all these worries become unfounded. With building completion  issues in the insurance process. He noted that the insurance
       insurance, the insurance company will assess the financial  was implemented under the Ministry of Commerce and was
       stability and experience of the construction company it intends to  initially applied to off-plan housing sales. However, today, the
       insure. If the insurer deems the construction company to be high-  focus is on urban renewal projects. Yaşar said “Urban renewal
       risk and incapable of completing the project, they may either  falls under the jurisdiction of the Ministry of Environment and
       refuse to provide insurance or request additional provisions. If  Urbanization.  And  the  ministry  is  anticipating  regulations  to
       the insurer does not perceive significant risks, they will issue the  enable the use of building completion insurance. Collaborative
       building completion insurance. During the construction period, if  efforts involving the Turkey Insurance Association, the SEDDK
       the company fails to fulfill its obligations to the insurer, engages  (Insurance and Private Pension Regulation and Supervision
       in activities that jeopardize its financial stability, or deviates from  Authority), and the Ministry of Environment and Urbanization
       agreed-upon construction materials, the insurance company can  are nearing completion in this regard. It is expected that the
       terminate the contract and report it to the relevant authorities.  SEDDK will soon finalize the regulations and present a draft
       If the contractor goes bankrupt during the construction period  as  a  package.  The  awaited  regulations  by  the  Ministry  of
       and cannot deliver the housing units to the owners, the insurance  Environment and Urbanization will be implemented, and the
       company will step in. They will either reimburse the consumer  obstacles will be removed. One hurdle is related to ensuring
       for all payments made up to that date or ensure the completion  fair competition with banks and the need to exempt taxes and
       of the construction and the delivery of the housing units to the  fees on mortgages and pledges for guarantees and building
       consumer.”                                            completion guarantee insurances. It is believed that when these
                                                             two regulations are in place, there will be no more barriers to
       Of Critical Importance in Urban Renewal               building completion insurance. In this context, the inclusion of
                                                             building completion insurance in the Medium-Term Program is
       Ahmet  Yaşar  emphasized  that  building  completion  insurance  of critical importance.”
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