DISASTER AND EMERGENCY MANAGEMENT PRESIDENCY DISASTER INSURANCE IN

DISASTER AND EMERGENCY MANAGEMENT PRESIDENCY DISASTER INSURANCE IN TURKEY 23 -24 April 2013, MACEDONIA- Berovo "lnsurance as a method for Disaster Risk Reduction in SEE 08 -12 April 2013, ANTALYA Workshop on integrated flood management, flood forecasting and early warnings Özlem VELİOĞLU MSc. Geological Engineer

TURKISH CATASTROPHE INSURANCE POOL (TCIP) 23 -24 April 2013, MACEDONIA- Berovo "lnsurance as a method for Disaster Risk Reduction in SEE

Because of the geologic and topographic structure and climate attributes of Turkey, it is frequently confronted with natural disasters that lead to immense losses of life and property. Natural disasters that affect Turkey can be put in order according to their severity: • earthquakes, landslides, water floods, rock sliding, fires, avalanches, storms and underground water movements. Within the past sixty years, when the statistics of the structural damage caused by the natural disasters are taken into consideration, it is observed that 2/3 of these damages occur due to earthquakes. As a result, in Turkey when natural disasters are mentioned, the first thing that comes to mind is earthquakes. 23 -24 April 2013, MACEDONIA- Berovo "lnsurance as a method for Disaster Risk Reduction in SEE

Earthquake Zonation Map of Turkey 23 -24 April 2013, MACEDONIA- Berovo "lnsurance as a method for Disaster Risk Reduction in SEE

Disasters in Turkey (in the last 100 years according to damaged houses) Avalanche and other %1 Earthquake %61 Fire %4 Rock Fall %5 Flood %14 23 -24 April 2013, MACEDONIA- Berovo "lnsurance as a method for Disaster Risk Reduction in SEE Landslide %15

23 -24 April 2013, MACEDONIA- Berovo "lnsurance as a method for Disaster Risk Reduction in SEE

23 -24 April 2013, MACEDONIA- Berovo "lnsurance as a method for Disaster Risk Reduction in SEE

23 -24 April 2013, MACEDONIA- Berovo "lnsurance as a method for Disaster Risk Reduction in SEE

SCOPE OF INSURANCE The Turkish Catastrophe Insurance Pool (TCIP) covers property (material) damages caused directly by earthquakes and other perils of fire, explosion, tsunami or landslide caused by earthquake for up to the sum insured under the Compulsory Earthquake Insurance Policy. 23 -24 April 2013, MACEDONIA- Berovo "lnsurance as a method for Disaster Risk Reduction in SEE

Natural Disaster Insurance Institution (TCIP) Established in 2000, Natural Disaster Insurance Institution (TCIP) is legal entity which is responsible for provision, implementation and management of Compulsory Earthquake Insurance in our country. TCIP aims at the continuance of citizens ’’life safely after the earthquake from where it is left. ’’ With Compulsory; 23 -24 April 2013, MACEDONIA- Berovo "lnsurance as a method for Disaster Risk Reduction in SEE

Why TCIP The geological structure of the country Burden the state budget 23 -24 April 2013, MACEDONIA- Berovo "lnsurance as a method for Disaster Risk Reduction in SEE Widespraed lack of awareness of insurance

TCIP’s aims • Earthquake Insurance, insured house owners are provided with pecuniary assurance against earthquake and the risks of fire, explosion, landslide and tsunami following the earthquake. • It mediates the normalization of life by indemnifying the building's damage immediately whether the building is inhabitable or partially damaged. • While improving the penetration of Compulsory Earthquake Insurance countrywide with a distribution network consisting of its partner insurance companies, their agencies and bank branches, TCIP aims at enabling everyone to have this assurance with its low premium costs. 23 -24 April 2013, MACEDONIA- Berovo "lnsurance as a method for Disaster Risk Reduction in SEE

We can list main purposes of this system; • Insure of all covered houses against earthquakes with affordable premiums • Enabling risk sharing in the country • Distribution of the financial liability of earthquake damages for our country to international reinsurance and capital markets via insurance • Reducing the financial liability of the government that is caused by the earthquakes – especially the construction of disaster houses after the earthquake. • Prevention of potential additional taxes which is caused by the government's financial liabilities and which will be reflected on the citizens • Usage of insurance system in the construction of healthy building as an incentive tool • Provision of long-term resource accumulation in terms of meeting the earthquake losses • Contribution to the development of insurance and social cohesion consciousness in the society 23 -24 April 2013, MACEDONIA- Berovo "lnsurance as a method for Disaster Risk Reduction in SEE

STRUCTURE OF THE TCIP The fundamental structure of TCIP is based on the publicprivate partnership initiation; 23 -24 April 2013, MACEDONIA- Berovo "lnsurance as a method for Disaster Risk Reduction in SEE

Insurable property Buildings and dwellings subject to compulsory earthquake insurance are as follows: • Buildings constructed as dwellings on lands subject to private ownership and have registered title deeds. • Independent sections within the context of the Condominium Law No: 634. • Independent sections situated inside residential buildings but used as small business establishments, bureaus, and similar purposes. • By reason of natural disasters, properties built by the government or built by housing credit. 23 -24 April 2013, MACEDONIA- Berovo "lnsurance as a method for Disaster Risk Reduction in SEE

Uninsurable property • Dwellings belonging to public body and institutions. • Dwellings built in residential areas of villages. • Dwellings entirely used for commercial and industrial purposes (block of offices, business centers, administrative service buildings, training center buildings etc. ), • Dwellings that are still under construction. • Independent units and dwellings that were built after December 27, 1999, without any construction permit granted within the framework of the legislation. 23 -24 April 2013, MACEDONIA- Berovo "lnsurance as a method for Disaster Risk Reduction in SEE

Scope of Coverage With the Compulsory Earthquake Insurance; • earthquakes • fires as a result of earthquakes • explosions as a result of earthquakes • landslides as a result of earthquakes Exclusions • Removal of debris expenses • Loss of profit • Loss of income • Loss of rent • Alternative residence and work place expenses • Financial liabilities and all other similar indirect damages brought forward • All sorts of movable goods, furnishings and other items • All personal injury including death • Claims of damages for pain and suffering 23 -24 April 2013, MACEDONIA- Berovo "lnsurance as a method for Disaster Risk Reduction in SEE

Essential Information and Documents for Insurance Policy • Name, address, telephone number and mobile phone number of the insured • Tax ID number and Turkish Republic ID number of the insured • Full address of the residence that is to be insured • Title deed information • Construction year of the building • The construction type of the building • Total number of floors in the building • The damage condition of the building • Gross square meter (m 2) of the dwelling (apartment) • Type of usage of the dwelling 23 -24 April 2013, MACEDONIA- Berovo "lnsurance as a method for Disaster Risk Reduction in SEE

TCIP Natural Disaster Insurance Institution Law No: 6305 Date of Acceptance: : 09/05/2012 CATASTROPHE INSURANCE LAW • The objective of this Law is to determine the procedures and principles for the compulsory earthquake insurance to cover the financial losses which may arise in buildings due to earthquakes and for the insurance and reinsurance coverages to be presented in order to cover the material and physical damages which may arise as a result of various disasters and risks which cannot be covered by insurance companies, or which bring about challenges with regards to offering coverage. 23 -24 April 2013, MACEDONIA- Berovo "lnsurance as a method for Disaster Risk Reduction in SEE

TARIFF AND INSTRUCTION OF COMPULSORY EARTHQUAKE INSURANCE Purpose and Scope The tariff and instructions - which are given below - are applied on the Compulsory Earthquake Insurance which will be provided pursuant to Catastrophe Insurance Law dated 09/05/2012 and numbered 6305. Tariff The TCIP’s premium tariff is determined by the Treasury Under secretariat and 3 factors determine the insurance premium amount: • Location of the building according to earthquake risk zones • Construction type of the building • Gross square area of the dwelling policy. As follows; the structure styles that are indicated in the tariff; A—Steel, Reinforced Concrete Frame Structures, B—Masonry Stone Structures, C—Other Structures. 23 -24 April 2013, MACEDONIA- Berovo "lnsurance as a method for Disaster Risk Reduction in SEE

There are 15 tariff rates determined according to 5 risk zones and 3 different construction types. Rates Based on Zones as per the Building Type (‰) ZONE 1 ZONE 2 ZONE 3 ZONE 4 ZONE 5 A-Steel, ferro-concrete, carcass buildings 2. 20 1. 55 0. 83 0. 55 0. 44 B-Masonry buildings 3. 85 2. 75 1. 43 0. 60 0. 50 C-Other buildings 5. 50 3. 53 1. 76 0. 78 0. 58 Maximum Assurance Amount Within the scope of Compulsory Earthquake Insurance, maximum assurance amount for a dwelling shall be 150. 000 TL notwithstanding with its building style. 23 -24 April 2013, MACEDONIA- Berovo "lnsurance as a method for Disaster Risk Reduction in SEE

Establishment of Insurance Fee The unit square meter costs which are settled according to the structure type and used in calculation of the insurance compensation are as follows Building Style Square Meter Fee that is taken as Basis for the Insurance Fee Calculation (TL) A-Steel, ferro-concrete, carcass buildings 700 B-Masonry buildings 500 C-Other buildings 260 This indicated gross square meter values changes in the ratios of the “Building Construction Cost Index, ” statements made by the State Institute of Statistics and announced in the Official Gazette. Insurance Term The term of the insurance is one year. The expired insurance policy shall be renewed every year by the insured or assured. 23 -24 April 2013, MACEDONIA- Berovo "lnsurance as a method for Disaster Risk Reduction in SEE

Agricultural Insurance System in Turkey Agricultural Insurance was passed on 14. 06. 2005 with Law No: 5363 Insurance implementations of TARSIM shall be supervised by the Undersecretariat of the Treasury, all other operations shall be supervised by the Ministry of Agriculture and Rural Affairs. 23 -24 April 2013, MACEDONIA- Berovo "lnsurance as a method for Disaster Risk Reduction in SEE

Agricultural Insurance System in Turkey In the Farmer Registration System, the following policies can be developed by using TARSIM Corporation (Agricultural Insurance Pool Corp. ); • Grant-aided herbal product insurance policies for all private and corporate entities whose production and field information are updated and valid. • Grant-aided animal life insurance policies for all great cattle and poultry in animal production enterprises with an enterprise number. • Grant-aided greenhouse insurance policies for all greenhouses whose product and technical information is valid, updated and registered in the system. • Grant-aided insurance policies for water productions made in registered plants. Natural risks to be covered such as drought, hail, flood, storms, tornadoes, earthquakes, fire, uncontrollable pests, diseases, and accidents for crops, greenhouses, agricultural buildings, agricultural machinery and livestock shall be determined by the Council of the Ministers based on the proposals of the Management Committee of the Pool. 23 -24 April 2013, MACEDONIA- Berovo "lnsurance as a method for Disaster Risk Reduction in SEE

Özlem VELİOĞLU MSc. Geological Engineer Disaster and Emergency Management Presidency ozlem. velioglu@afad. gov. tr Thank you… 23 -24 April 2013, MACEDONIA- Berovo "lnsurance as a method for Disaster Risk Reduction in SEE