What is the Compulsory Earthquake Insurance Institution (DASK)?
Turkey is located in a geography where some of the largest earthquakes in history have occurred, due to its geographical position. In Turkey, there are three major fault lines, and the country is in a first-degree earthquake zone. Particularly after the significant loss of life and property in the August 17, 1999, Gölcük earthquake, steps have been taken to implement measures for the future. In this context, the Natural Disaster Insurance Institution (DASK) was established. The mission of DASK is to organize and supervise the guarantee system to mitigate the risk arising from potential earthquakes, in cooperation with insurance companies. The aim of DASK is to secure all real estates, especially residences as specified by the Law, reduce the financial burden on the state due to earthquakes, and share the financial load by insuring it.
What Information is Required to Obtain Mandatory Earthquake Insurance (DASK Policy)?
According to the Natural Disasters Law No. 6305, obtaining earthquake insurance has become mandatory.
To obtain mandatory earthquake insurance, the policyholder's name-surname, address, mobile phone number, Turkish ID number, and tax identification number for legal entities are required.
Also required are the insured building's detailed address (address code), title deed information, year of construction, construction style, total number of floors, damage status, gross square meter (square meter) of the residence (apartment), and usage type.
Finally, it should be noted that mandatory earthquake insurance is entirely based on declaration, and any material losses arising from false declarations are the responsibility of the policyholder.
What are the Features of Mandatory Earthquake Insurance (DASK Policy)?
1-) It is Mandatory.
As its name suggests, Mandatory Earthquake Insurance is one of the compulsory types of insurance. In Turkey, all real estate owners and usufruct right holders are obliged to obtain this insurance.
According to Article 10 of the Disaster Insurance Law No. 6305, the buildings defined below are secured with mandatory earthquake insurance:
Buildings constructed as residences on real estate that is registered in the land registry and subject to private ownership.
Independent sections within the scope of the Condominium Law No. 634.
Independent sections used for commercial purposes, offices, and similar purposes within these buildings.
Residences constructed or financed by the state due to natural disasters.
Mandatory Earthquake Insurance also applies to the following, provided they meet the above conditions:
Buildings with established floor easements.
Buildings not yet reclassified in the land registry and still listed as "land, etc."
Cooperative houses for which title deeds have not yet been allocated.
The exclusions of Mandatory Earthquake Insurance are:
Buildings owned by public institutions and organizations.
Buildings in rural settlement areas.
Buildings used entirely for commercial and industrial purposes (Business Centers, Administrative Service Centers, Educational Centers, etc.).
Buildings that are not yet fully constructed.
Buildings constructed on land not registered in the land registry and not subject to private ownership (such as treasury lands).
It also covers uninhabitable, neglected, dilapidated, or deserted buildings not suitable for residential use.
There are also certain sanctions for not obtaining Mandatory Earthquake Insurance (DASK). For example, Article 11, Paragraph 3 of Law No. 6305 states, "In the utility subscription processes for buildings and independent sections covered by mandatory earthquake insurance, the existence of the insurance will be verified by the relevant institution." This means that buildings without DASK will not be connected to water and electricity. Additionally, the state does not grant housing loans for residences without DASK.
2) It Must Be Renewed Annually.
According to Article 10/3 of Law No. 6305, owners or usufruct right holders of buildings and independent sections for which DASK is mandatory must obtain this insurance, and it must be renewed annually. If an earthquake occurs during a period when the insurance is not renewed, DASK will not cover the damages. Also, two different DASK policies cannot be issued for the same property.
3) It Only Covers Risks Arising Solely Due to Earthquakes.
The purpose of mandatory earthquake insurance is to cover material damages to the insured property caused by earthquakes. DASK is not responsible for damages caused by other natural disasters such as fires or floods. However, if a fire or tsunami occurs as a result of an earthquake, DASK is also responsible for the damages caused by these incidents.
4) It Only Covers Damages to the Building.
Mandatory earthquake insurance covers only damages to the building itself. For example, it covers damages to the building's foundation, stairs, elevators, roof, garden walls, retaining walls, etc.
DASK does not cover the following situations:
Debris removal costs.
Loss of profits.
Business interruption.
Loss of rent.
Costs for alternative residence and workplace.
Liability claims and other similar indirect damages.
All kinds of movable property, goods, and similar items.
All bodily injuries and deaths.
Claims for moral compensation.
Damages caused by events other than earthquake, fire, explosion, tsunami, or landslide resulting from an earthquake.
Damages that have occurred over time due to the building's own faulty construction, independent of the earthquake.
5) The Value for Compensation is Redetermined Each Year and Damage is Covered Up to the Specified Limit.
The amount of damage compensation payable to the insured after an earthquake is recalculated and announced each year. DASK policy does not make unlimited payments; it calculates the payment based on the gross square meter of the building and the unit price payable.
Firstly, the maximum coverage amount provided by DASK for all types of structures is 640,000.00 TL. Regardless of the value of the building, DASK will pay a maximum of 640,000.00 TL, even if the building is completely destroyed.
As of 25 November 2022, the gross square meter prices have changed. For residences, the calculation is based on the GROSS square meter price. While the gross square meter price for reinforced concrete structures is 3,016.00 TL, it is 2,080.00 TL for other types of structures.
Following the earthquakes in Kahramanmaraş on 06.02.2023 and in Hatay on 20.02.2023, it has been observed that DASK has been making payments to insured individuals whose buildings were damaged based on the rates prior to 25 November 2022. However, payments should be made based on the current values. In other words, payments should be made based on 3,016.00 TL per gross square meter, not 1,508.00 TL. It is possible for citizens who have received insufficient payments to obtain the balance through litigation.
6) The Premium to be Paid Varies from Region to Region.
The premium amount to be paid for mandatory earthquake insurance is determined by the Mandatory Earthquake Insurance Tariff and Instruction. The premium amount depends on the location of the property to be insured, the earthquake risk in that region, the age and square meter of the property, and similar factors. According to Article 13 of the Disaster Insurance Law No. 6305, "In determining insurance premiums, factors such as the building's area, type and quality of construction, soil characteristics of the land the building is on, earthquake risk, and similar elements are considered."
Even if an insurance policy is issued, if the premium is not paid, the insurer's responsibility is not considered to have commenced. Therefore, if an earthquake occurs during this period, no payment will be made.
How is the Application Process to DASK After an Earthquake?
Once an earthquake occurs and damages the building, the risk has materialized. Citizens whose homes are damaged in the earthquake must file a damage report through Alo 125, e-government, or the damage notification section on DASK's website. The insured can also report the damage to the insurer who issued the insurance policy on behalf of DASK. This damage report should be made within 15 days after learning that the building has been damaged in the earthquake.
After the notification, DASK first opens a damage file. Then, an adjuster is assigned to the file, and their information is sent to the insured via SMS.
A date is agreed upon for the inspection of the damaged area by the parties, and on the specified date, the adjuster conducts an inspection and subsequently prepares a report. This report is sent to DASK, and the necessary payments are made.
Throughout this process, citizens should provide the necessary information and documents to the authorities and assist them in inspecting the damaged building. Similarly, the estimated amount of damage should also be reported to the authorities.
What is DASK Deductible?
Insurance deductible is applied in mandatory earthquake insurance. The DASK deductible is 2% for each damage. In other words, the insurer is exempt from damages that do not exceed 2% of the policy limit, and these damages remain the responsibility of the insured.
Furthermore, the deductible amount, calculated as 2% of the policy limit, is deducted from the compensation after it is calculated. In the application of the deductible, damages occurring within every 72-hour period are counted as a single damage incident.
What is the Statute of Limitations for Lawsuits Against DASK?
The statute of limitations is a legal concept that allows a debtor to avoid paying a debt due to the creditor's failure to exercise their rights within the time limits explicitly set by law. In other words, while the creditor could have obtained their rights through a lawsuit, they may lose this right due to the statute of limitations defense raised by the debtor.
For lawsuits arising from a mandatory earthquake insurance policy, the statute of limitations is 2 years from the end of the contract. Lawsuits filed after this period can be dismissed based on the statute of limitations defense.
Which Court Has Jurisdiction and Competence in Lawsuits Against DASK?
For lawsuits against DASK due to disputes arising from a mandatory earthquake insurance policy, the competent court is the one in the location where DASK is situated or where the risk materialized. In cases initiated by DASK, the competent court is the one in the defendant's place of residence.
The jurisdiction of the court varies depending on the type of property. If an insurance policy is issued for a structure used as a residence, it is considered a consumer transaction. According to Article 3/1-k of the Law No. 6502 on the Protection of the Consumer, a “real or legal person acting for non-commercial or non-professional purposes” is defined as a consumer; and in Article 3/1-l, “all kinds of contracts and legal transactions including work, transportation, brokerage, insurance, agency, banking, etc., established between real or legal persons acting for commercial or professional purposes, including public legal entities, and consumers” are defined as consumer transactions. Therefore, in this case, the lawsuit should be filed in a consumer court.
If the insurance policy is issued for a workplace, the lawsuit should be filed in a commercial court.
For disputes arising from insurance contracts, an alternative dispute resolution method is available through the Insurance Arbitration Commission. Detailed information about applying to the Insurance Arbitration Commission can be found at www.sigortatahkim.org.
Mandatory Mediation and Legal Process in Lawsuits Against DASK
In lawsuits filed against DASK, whether in consumer courts or commercial courts, the applicant must undergo the legally mandatory mediation process before filing a lawsuit.
The lawsuit should be initiated after the mandatory mediation process. Once the procedural formalities in the lawsuit are completed, the investigation process is conducted, and the court renders a decision. If appealed, the legal process stages are completed, and the court's judgment becomes final.
As explained above, the DASK application process, whether payments are made in full, the calculation of DASK compensation, mediation meetings, correctly determining the competent and authorized court, conducting various procedures in the lawsuit (formation of parties, presentation of evidence, hearings, expert reports, amendments, decision phase, appeal stage), and the execution of the court's judgment can be complex and prone to irreversible errors. These mistakes can lead to significant loss of rights and financial damages. Therefore, professional support should be sought in lawsuits against DASK, and an expert lawyer should be consulted.
Frequently Asked Questions
Are workplaces subject to mandatory earthquake insurance?
Buildings used entirely for commercial or industrial purposes are not covered by mandatory earthquake insurance. However, independent sections within residential buildings used for commercial purposes, such as shops or offices, must be insured.
Are buildings registered as land, vineyard, garden, or field in the land registry covered by mandatory earthquake insurance?
Regardless of whether buildings constructed as residences but registered as land or fields in the land registry are subject to independent ownership or floor easement, they are subject to mandatory earthquake insurance under Law No. 6305.
Can parts of a building described as "basement" or "woodshed" in the title deed be insured?
If these areas are constructed as residences but appear as woodsheds or coal sheds, they must be insured. Separate title deeds are required for these areas. General areas like the building's common woodshed or coal shed are not required to be individually insured as they are implicitly included in the insurance value of the building.
Can mudbrick houses be insured for mandatory earthquake insurance?
Mudbrick and similar houses classified under "Other Structures" can be insured for mandatory earthquake insurance.
Are buildings in rural areas covered by mandatory earthquake insurance?
Buildings in rural areas are not subject to mandatory earthquake insurance due to the absence of municipal supervision.
Can a tenant insure the property in their own name?
Tenants cannot take out mandatory earthquake insurance in their own name. They can insure on behalf of the landlord, but compensation is paid to the person listed as the owner in the title deed.
If there is a discrepancy between the square meters in the title deed and the actual building, which is considered?
The insured's declaration is taken as the basis. If the gross area of the residence differs, compensation is recalculated based on the premium paid and the premium that should have been paid according to General Conditions of Mandatory Earthquake Insurance.
Can buildings with damage be insured?
Severely damaged buildings that need to be demolished for safety cannot be insured until rebuilt. Moderately damaged buildings must be repaired or reinforced to be insured, with documentation of these processes provided. Slightly damaged and undamaged buildings can be insured based on the insured's declaration.
How is the insurance payment calculated after an earthquake by DASK?
The payment is calculated by multiplying the gross area of the residence with the per square meter prices set by the Ministry of Treasury and Finance. The unit price per square meter is 3,016 TL for reinforced concrete buildings and 2,080 TL for other structures, with a maximum payment limit of 640,000 TL as of 25.10.2022.
Is only one payment made for multiple damages in a one-year policy period?
The policy is not limited to one damage claim. If another earthquake occurs within the same policy year, payment is made following the same procedures. However, if the building collapses in an earthquake and the total compensation is paid, the policy coverage ends.
How are payments made when there are multiple owners?
If the owner or usufruct holder dies, the compensation is paid in proportion to the shares of the owners listed in the title deed or inheritance decree.
What if there is no damage to the residence but there is damage to common areas?
If only common areas are damaged in an earthquake, compensation is paid in proportion to the insured's share in the property.
If there is a mortgage on a home purchased with a loan, who is paid?
If there is a mortgage on the policy or title deed, compensation is paid to the owner listed in the title deed with the consent of the mortgage holder. Otherwise, payments are made to the mortgage holder.
When is the compensation paid by DASK?
DASK must make the payment within one month after determining the compensation amount.
Can a lawsuit be filed if compensation is not paid or is underpaid?
A lawsuit can be filed against DASK if payment is not made or if underpayment occurs for any reason. However, remember to apply for mediation before filing a lawsuit.
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