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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.”