Mandatory Property Insurance - This is a type of mandatory insurance that owners of residential houses, as well as non-residential areas in Azerbaijan, are obliged to purchase in accordance with the law. It covers damage to your property caused by fire, explosion, flooding, landslides, and other disasters. 

What does it cover?

• Only damage to the house, apartment, or facility itself (walls, ceiling, floor, renovations)

What does it NOT cover?

• Furniture, household appliances, and personal belongings
• Any other movable items
• Damage to health

Who is it mandatory for?

• For everyone who owns a house, apartment, or non-residential area in Azerbaijan

Important note:

• Voluntary Property Insurance - protects real estate at its full value and can also cover movable property, furniture, household appliances, and other risks 
• Mandatory Property Insurance - protects only the real estate itself, in the amount of 15,000, 20,000, and 25,000 manats depending on the region 

Requirements for Mandatory Insurance of Real Estate - Mandatory insurance of civil liability related to the operation of real estate is provided for in Chapter 3 of the Special Section of the Law of the Republic of Azerbaijan "On Mandatory Insurances." This insurance is applied to compensate for damage to the health and property of third parties during the operation of the relevant property, including construction, repair, reconstruction, or other works on the territory of that property. For these purposes, "real estate whose operation requires mandatory civil liability insurance" refers to buildings, structures, facilities, and areas operated by legal entities to carry out their activities, as well as by individuals engaged in entrepreneurship without creating a legal entity. Civil liability insurance against third parties in connection with the operation of any of the listed properties is mandatory. 

Insurance Amounts and Deductibles for Mandatory Property Insurance - With the exception of residential houses and apartments, insurance amounts for other real estate are determined as follows:

• For structures and buildings – in the amount of the restoration value (the cost of building the same type of structure/building in the same location). When determining restoration value, the wear coefficient of materials and the technical condition of the property are taken into account.
• For non-residential areas – in the amount of the average market value of property of the same type and in the same technical condition in that location.

The deductible (franchise) - amount for mandatory insurance of other real estate is agreed upon in the contract. For residential houses and apartments, the insurance amounts and unconditional deductibles are determined as follows:

• For real estate in Baku: insurance amount 25,000 manats, deductible 250 manats.
• For real estate in Ganja, Sumqayit, and Nakhchivan: insurance amount 20,000 manats, deductible 200 manats.
• In other residential areas: insurance amount 15,000 manats, deductible 150 manats.