AZE.US
Only about 15-20% of real estate in Azerbaijan is currently insured, according to a representative of the insurance sector, a figure that has drawn renewed attention after a series of heavy rains, flooding incidents and hail damage across the country.
Emil Agabagirov, a member of the expert group at the Insurers Association, said the insured share includes both residential and non-residential properties. He noted that a decline seen earlier this year does not necessarily mean public interest in insurance has collapsed. In some cases, businesses have moved online and no longer renew coverage for rented commercial premises. In others, longer-term insurance agreements or delayed renewals may explain the shift.
Still, the recent wave of extreme weather has exposed how many owners remain financially vulnerable. After intense rainfall on March 27-30, insurance companies received 4,576 claims, covering damage to both vehicles and property. A second round of heavy rain on April 2-4 generated another 620 claims. According to the estimates cited in the discussion, claims involving insured property alone exceeded 5 million manats, while preliminary damage calculations rose above 3 million manats.
The broader damage may be far higher. Agabagirov said losses linked to uninsured property may have reached 20 million to 30 million manats, but owners without coverage should not expect compensation from insurers.
The discussion also highlighted how insurance coverage works in practice. In the case of vehicles, mandatory insurance covers damage caused to third parties in road accidents. Damage from hail, flooding, falling objects and similar risks is covered only under voluntary casco insurance. For a car worth around 20,000 manats, annual casco coverage costs about 400 manats, according to the expert.
For homes, mandatory property insurance is based on fixed regional tariffs. In Baku, annual coverage costs 50 manats and provides protection of up to 25,000 manats. In Ganja, Nakhchivan and Sumgayit, the annual premium is 40 manats for coverage up to 20,000 manats. In other cities and districts, residents pay 30 manats per year for insurance coverage worth 15,000 manats.
The expert also said that if a homeowner has mandatory insurance, damage caused to that apartment, including flooding from a neighbor, is covered under the owner’s own policy. But if damage is caused to neighbors by your property, that requires separate voluntary liability insurance, which he said may cost around 30 to 40 manats a year.
Payment delays were another issue raised in the discussion. According to the explanation given, once the required documents are submitted and the loss assessment is completed, the insurer is supposed to make payment within seven working days. If that deadline is missed, the insurer must pay a penalty of 0.1% for each day of delay.
The takeaway from the recent weather shocks is straightforward: for many households, skipping an annual insurance payment of 30 to 50 manats may save a little money upfront, but it can leave families facing losses worth hundreds or thousands of manats when disaster hits.
AZE.US