The Turkish insurance model will be implemented in Albania/ How does the mandatory earthquake scheme work in Turkey and Romania?
According to the Ministry of Finance's draft law on mandatory earthquake insurance for homes, this model is inspired by successful international practices, especially from countries like Turkey and Romania, which have managed to significantly reduce the fiscal and economic costs caused by natural disasters.
But how does this scheme work specifically in Turkey and Romania?
Turkey is a country highly vulnerable to earthquakes, so to guarantee full coverage of damages, earthquake insurance has been mandatory since 1999, but implementation began a little later.
In Turkey, homeowners can head to the nearest insurance company or bank branch to insure their property.
The amount of policy premiums issued each year is calculated according to the type of construction of a home, its gross floor area, year of construction, number of floors and what earthquake risk group their neighborhood is in. TCIP is the Turkish state institution for catastrophe insurance, which takes care to keep the premium amount at a level that all citizens can afford.
Every citizen who renews their insurance contract every year benefits from a renewal discount. Discounts or price increases are applied in accordance with the date of construction and the number of floors.
The citizen first applies to the TCIP Call Center when their home is damaged by an earthquake. They only need to submit their policy and/or national identification number, the full address and telephone number of the earthquake-damaged home to open a claim tracking file. Once the claim from the insured party has been submitted, the TCIP Loss Estimator visits the insured homes, where the damage is assessed as quickly as possible and the amount of compensation is determined.
The compensation amount is sent by TCIP to the nearest bank branch in the name of the beneficiary.
Meanwhile, in Romania, the mandatory earthquake insurance scheme has been managed since 2009 by a public-private fund in which insurance companies are shareholders. The annual premium paid ranges from 10 euros to 20 euros, depending on the type of building. Despite the fact that earthquake insurance is mandatory in Romania, there are still a large number of citizens who choose not to insure their homes.
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