Home insurance is common practice in Western Europe and North America, and is recently gathering pace in Russia and some countries of the Asian region.
Home insurance in Kyrgyzstan is also a relevant matter as rural regions have devastating earthquakes from time to time, and mudflows destroy homes. Also, residential burglaries in private houses, accidents: floods, fire, explosion, etc. often take place in the country.
Despite this, the practice of home insurance in the country started relatively recently. In 2016, the republic adopted the law “On compulsory insurance of residential premises against fire and natural disasters” and the state enterprise “State Insurance Organisation” was established.
Here’s the explanation of the introduction of the residential premises insurance in Kyrgyzstan.
Why do I have to insure my home?
Your apartment can burn down because of an unextinguished cigarette as in spring 2020 in the 4th microdistrict of Bishkek or because of faulty electrical wiring. Even if you are confident of your absolute caution and vigilance, your apartment can still be damaged by fire in a neighbouring apartment, as happened with two apartments in early September at one of high-rise buildings in Dzhal microdistrict. The house can be destroyed by a blast of gas at one of apartments, like in the Russian city of Magnitogorsk.
Also, Kyrgyzstan has frequent earthquakes – both strong and moderate. Both have a devastating impact on the condition of private houses. However, houses in Kyrgyzstan more often become unfit for use due to mudflows in the mountainous regions of the republic.
In such cases, the insurance compensation, depending on the loss severity, may partially or even fully cover the costs of repair and rehabilitation of a damaged house. Or serve as reserve funds to overcome an immediate crisis, arrange one’s thoughts and think about further actions.
Fine. How can we insure a house?
In Kyrgyzstan, there is only one company that is licensed to insure residential premises – it is the State Insurance Organisation. It was established specifically for such purposes by the government at the end of 2015.
To insure your house, you should prepare a list of documents:
a copy of the policy holder’s passport:
a copy of technical certificate for the residential premises or inventory file, or cadastral plan of the real property, or a certificate from the village council confirming the ownership of the real property.
and enter into contract with the State Insurance Organisation at one of its branches located in regional centres of the country: Bishkek (Chui region), Naryn, Talas, Karakol, Batken, Osh and Dzhalal Abad. Their locations and telephones are specified on the website.
Also, it has regional representative offices, which are often located in the buildings of district administrations. You can learn their locations and telephones at regional branch offices.
Payment may be made via state banks of Aiyl Bank and RSK, as well as via mobile wallets and payment terminals.
What are the conditions?
If your house is located within the city (within the perimeter of the agglomeration according to documents), the minimum rate of the insurance amount per house or apartment shall be 1,200 som (14 dollars) a year. When a loss occurs, you can count on compensation in the amount up to 1,000,000 som (nearly 12,000 dollars).
In rural areas, the minimum annual payment to the insurance company is 600 som (7 dollars), and the maximum compensation amount will be respectively half as much – up to 500,000 som (6,000 dollars).
The final amount of compensation shall be determined upon the assessment of damage by specialists of the State Insurance Organisation. If a reason of destruction or damage is a qualifying event, you can count on payment of funds depending on the extent of damage done to the residential premises.
You can count on even more compensation if you pay more insurance premium. These conditions are discussed with a customer on a case-by-case basis.
What is an insured event?
The following events are listed on the website of the State Insurance Organisation:
fire (the impact of flame, smoke, high temperature), including the one arising outside the insured premises;
penetration of water as a result of legitimate actions to suppress fire;
natural mountain dam failure;
flooding, ground water rise – immediate ground water rise and other;
heavy rain, showers (freezing rain, shower of sleet);
heavy snow showers;
When can they refuse to pay?
– The tragedy happened on the 3rd, and the day before you forgot to renew the contract and pay the premium for the next year;
– Also, if it is found out that you specially caused damage or destroyed the house to get compensation. Or, if you were warned in advance about a possible tragedy, but failed to do anything to prevent it (did not repair the wiring, put a gas cylinder in an improper place, the water level was rising and you did nothing about it);
– If the compulsory insurance contract expired before the insured event;
– The insured event took place before the compulsory insurance contract came into effect;
– The insured house was destroyed or damaged for reasons other than insured event;
– If the insured event occurred due to intent or gross negligence of the policy holder, beneficiary or adult family members, except for cases when deliberate actions were committed in a state of justifiable defence or extreme necessity;
– Failure to comply with fire safety rules by the policy holder (for example, starting fire in an improper place, improper installation of the wiring, improper installation of heating stoves and appliances).
How many people already received compensations and in what amounts?
Home insurance practice began in January 2016. As of September 2020, there are 82,075 existing contracts, of which almost 98 per cent are contracts of compulsory insurance of residential premises against fire and natural disasters and about 2 per cent are contracts of voluntary insurance of house against fire and other hazards.
For the period from January 2020 to September 2020, 125 victims of fire and natural disasters were paid 6 million 3 thousand som (about 73 thousand dollars). In total, State Insurance Organisation made (from 2016 to the present) 472 payments in the amount of 35 million 472 thousand som (about 432 thousand dollars). The most common insured events are fires, hurricanes and mudflows.
Is it compulsory to insure house?
According to the law, it is compulsory. The law’s name is “Law of the Kyrgyz Republic “On compulsory insurance of residential premises against fire and natural disasters”.
Some users of social media and news websites write that household supervisors and village councils do not issue certificates if there’s no insurance; some civil servants also report cases of coercion.
However, the law does not provide for any sanctions for the lack of a home insurance policy. But if something happens to your house, you cannot count on the state either.
Could I count on the state before?
Yes, you could. Before the end of 2015, the government of Kyrgyzstan provided financial and/or material support to those whose houses were damaged or destroyed by natural disasters. The republican budget allocated funds for such cases every year. Often, rural and mountainous area residents received such help.
When can they refuse to insure my house or apartment?
The State Insurance Organisation can refuse to insure your house if it is:
To be demolished;
Levied under obligations;
Located in houses (buildings) to be transferred due to the withdrawal of the land plot;
Built with violations of technical requirements;
To be confiscated.
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