Under what conditions is property insurance impossible in Azerbaijan?

By Trend

Property insurance is impossible if a citizen does not have a formal right to property, insurance expert Khayal Mammadkhanli said, Trend reports.

Khayal Mammadkhanli noted that according to the law, if a citizen wants to insure property, he o she must have right to the property or be the actual owner of this property. If this is not the case, the expert commented, then insurance of such property is not possible.

"In this case, it is enough to conclude a contract of property sale, the presence of an order or an extract from it. Therefore, citizens should know that without property documents it is neither possible to insure nor to fine a citizen," the expert said.

The expert also noted that in accordance with the requirements of the Law "On Mortgage", mortgaged property is subject to compulsory insurance. In this case, banks require insurance of such property.

"In this case, banks usually require insurance within the amount which they issued a mortgage to a citizen. If this amount is below 25,000 manat [$14,705], then compulsory insurance covers it in full," Mammadkhanli said.

The expert noted that real estate insurance recorded an annual growth of 20 percent or almost five million manat ($2.9 million), which indicates that the funds collected currently exceed 30 million manat ($17.6 million).

"Nevertheless, it is clear that at least we have managed to form an insurance culture among people. The law should be implemented in a systematic form," the expert added.