Compulsory real estate insurance - basis for developing insurance segment in Azerbaijan

Finance Materials 9 January 2020 19:51 (UTC +04:00)

BAKU, Azerbaijan, Jan. 9

By Nargiz Ismayilova – Trend:

The implementation of compulsory insurance will create the basis for widespread of the insurance system in Azerbaijan, analyst at the Center for Economic Reforms Analysis and Communication Masuma Talybova told Trend.

"Citizens in most cases do not take into account negative events and incorrectly assess future risks,” the analyst said. “As a result, cases of concluding voluntary insurance contracts on the initiative of citizens are rare.”

“In unforeseen circumstances, property may be damaged, people may lose their house or property, which is their source of income,” Talybova said. “As a result, citizens are left without houses or work and thereby in a short period of time they lose things that have been acquired within many years. When such events occur, the state is the only hope.”

“Although the Azerbaijani government in many cases compensates for damage caused during natural disasters and fires, the world experience shows that the state is in no way liable for damage to property that is not the state property,” the analyst said.

“The damage worth $58 billion inflicted on the Twin Towers (World Trade Center) in New York during the events of September 11, 2001, can be mentioned as an example,” Talybova said. “These towers were insured and compensations were paid by insurance companies."

“Many citizens, who do not have enough information in the field of insurance, consider this process very expensive and complicated,” the analyst said. “Therefore, they consider real estate insurance as ineffective. That is why the creation of compulsory real estate insurance system is very important.”

“Thus, compulsory real estate insurance with minimum payments guaranteeing compensation for damage, also increases the citizen's responsibility and serves to popularization of insurance in the country, turning it into a new trend,” Talybova said.

“This increases awareness of citizens in this sphere, protects against possible unforeseen events and reduces risks," she said.


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