Baku, August 8 – Property insurance is a crucial safeguard against unexpected risks to your home—particularly for houses purchased with a mortgage. But who actually compensates for the damage if disaster strikes: the bank or the insurance company?
According to insurance expert Shahin Ismayilov, speaking to Moderator.az, compulsory property insurance is one of the key products in Azerbaijan’s insurance market. By law, every property owner must obtain it. Although fines are stipulated for failing to do so, they are rarely enforced, as the mechanism for applying them has yet to be developed—allowing many homeowners to bypass the requirement.
Premiums vary by location:
Baku – 50 AZN annually for coverage up to 25,000 AZN
Ganja, Sumgayit, Nakhchivan – 40 AZN for coverage up to 20,000 AZN
Absheron and other regions – 30 AZN for coverage up to 15,000 AZN
The policy covers natural disasters such as earthquakes, hurricanes, and hail, as well as fire, explosions, flooding, burst pipes, short circuits, and deliberate damage by third parties. Compensation is provided within the insured amount, either partially or in full.
For mortgaged homes, the insurance company covers losses according to the terms of the policy. However, in cases of total destruction, the payout may go directly to the bank, as the lender retains ownership rights to the property until the mortgage is fully repaid. Only after the final payment does the borrower gain full ownership.
