Building Completion Insurance in Türkiye: What It Is and Who It Protects

What Building Completion Insurance Is

Bina tamamlama sigortası, building completion insurance, is a surety product agreed between the insurer and the contractor or seller undertaking the construction. The policy is issued in that party's name; those who benefit are the landowners and consumers named as beneficiaries.

Protection does not sit in the policy but in the separate guarantee certificates the insurer issues to each beneficiary. That distinction is the key: a seller holding a policy does not protect you, a certificate in your name does.

The product is governed by the General Conditions of Building Completion Insurance, made under Article 11(1) of Insurance Law No. 5684. The current text, replacing the wording applied since 2015, came into force in 2024.

That revision widened the scope. Alongside pre-paid housing sales, urban transformation projects under Law No. 6306 and all other construction projects came within the cover. Landowners, not only consumers, can now ask their contractor for it.

The premium is owed by the seller or contractor; the buyer pays nothing for the certificate.

Is Building Completion Insurance Compulsory?

What is compulsory is security, not this particular policy. Article 42 of Consumer Protection Law No. 6502 requires the seller, for projects above the size the Ministry sets by unit count or total project value, to take out building completion insurance or provide the other securities and conditions the Ministry determines, before starting pre-paid housing sales. That threshold is set in the Regulation on Pre-Paid Housing Sales: projects of thirty units or more.

The choice belongs to the seller. A buyer cannot insist on this policy specifically, but is entitled to ask which security has been provided and to see the document. What sets it apart is the remedy: if the seller fails to perform, the insurer may choose indemnity in kind, having the construction finished on the seller's behalf. Under the other securities the buyer's bank-channel payments are still protected, but there is no route to completing the building.

For projects below thirty units there is no obligation to provide security; all the other rules on pre-paid housing sales still apply.

Urban transformation works differently. For projects in areas and plots under Law No. 6306, the contractor must take out conforming building completion insurance, or provide the other securities and conditions, before obtaining the building permit. The trigger is the permit application, not the number of units.

There is also an immunity rule. Indemnities, securities and similar guarantees under this insurance cannot be included in a bankruptcy or liquidation estate, seized, or made subject to interim injunction or attachment (Article 42/2 of Law No. 6502). That is what makes it meaningful: when the seller fails, the buyer does not join the queue of creditors.

For projects of thirty units or more, the securities the seller may provide before starting sales are these:

• Building completion insurance
• Bank letter of guarantee
• Progress payment (escrow-style) system
• Security through linked credit
• Other methods approved by the Ministry

What the Guarantee Certificate Does

The parties to the contract are the insurer and the seller; the buyer is a beneficiary, not a party. That is why the buyer's document is not the policy but the guarantee certificate.

The mechanics run as follows. For a project with a building permit, or approved by the relevant authority where the legislation requires it, a policy is issued before sales begin, allocating a maximum guarantee limit for the pre-paid part. Once sales start, provided the seller submits complete consumer documentation, the insurer reviews it within a reasonable period and issues a separate guarantee certificate for each consumer over the sale price, sent to the consumer's address with the key facts form.

Here is the critical detail: the certificate constitutes security only for payments made through the banking system. Cash payments with no bank record fall outside it. Paying through a bank is the simplest safeguard in the whole transaction.

The insurer's liability towards the consumer, provided the right of withdrawal has not been exercised, begins at the end of the withdrawal period, effective from the date the certificates were issued. In pre-paid housing sales that period is fourteen days (Article 43 of Law No. 6502).

If the sale has gone through but no certificate has been issued in your name, request it from the insurer or the seller. Its authenticity can be verified free of charge through the query service of the Insurance Information and Monitoring Centre.

When Does the Cover Respond?

What buyers meet most often is the third of the covered situations: the delivery date has passed and the site has stopped. The loss is deemed to occur not on that date but on failure to complete and deliver within the 12 months after it — in practice, a year of waiting.

One exception applies to that count. Where, through no fault of the insured, a change in legislation or an act of a public authority requires the project to be brought into line, the reasonable period until that is done is left out of the calculation.

What counts as delivery is defined too. Unless a narrower scope was agreed, a property fit for occupation is one where, in conformity with the building permit and the sales contract, the roof is closed, plastering and painting are done inside and out, stairs and any lift are ready, the unit's electricity, water, heating, kitchen, bathroom and sanitary installations are complete and the floors laid; and where the project's pool, sauna, gym and similar shared facilities, with landscaping, lighting, irrigation and maintenance of common areas, are finished, all as determined by an insurance loss adjuster.

Article 8 of the General Conditions governs when cover may be widened by supplementary agreement. Whether project-specific risks are covered is visible only by reading the policy and the certificate.

Article 7 of the General Conditions lists the situations within cover as follows:

• Bankruptcy of the insured, meaning the seller or the contractor
• Where the insured is a natural person, death followed by the heirs renouncing the estate
• Failure of the insured, including through acts contrary to the legislation and to the project, to complete and deliver the property within 12 months following the maximum period stated in the relevant contract or legislation, or the delivery date undertaken in the project

What the Insurer Does When the Loss Occurs

Where the home cannot be delivered because of a covered situation, the buyer applies to the insurer with the certificate issued in their name. The insurer may request information and documents and inspect the site. It then performs its indemnity obligation by one of two routes and notifies the seller and the consumers.

For indemnity in kind, the seller's construction servitude right must be transferred to the insurer and registered at the land registry under the sales contract, or a notarised promise-to-sell agreement drawn up undertaking that transfer.

That route carries a rent allowance. After the site is handed over, the insurer pays beneficiaries a monthly rent equal to 0.5 per cent of the inflation-adjusted construction cost of the unit, until the home is delivered. These payments are not set against the maximum guarantee amount in the certificates, so they do not erode the security.

Expiry of the policy does not end the protection: the insurer's liability arising from certificates issued before that date continues.

The underlying contract is different. If the consumer withdraws from the sales contract, the insurer cancels the certificates issued in the beneficiaries' names and removes them from the insured's guarantee account.

What Buyers Should Check

The law draws further lines around pre-paid housing sales. No such contract may be made before a building permit is obtained (Article 40/3 of Law No. 6502). The sale must be registered in the land registry, or the promise-to-sell agreement notarised (Article 41). The transfer or delivery period may not exceed forty-eight months from the contract date (Article 44), raised from thirty-six by Law No. 7392.

The checklist below gathers what to ask before signing.

• If the project has thirty units or more, ask which security the seller has provided and ask to see the document.
• Make every payment through the banking system; the guarantee certificate covers bank-channel payments only.
• Follow up whether a separate guarantee certificate has been issued in your name, and request it from the insurer or the seller if not.
• Check that the certificate states the type of construction project, the maximum guarantee limit allocated for your benefit, the insurer's statement on indemnity and the validity date, which should be at least the project period plus 12 months.
• Verify the certificate free of charge through the query service of the Insurance Information and Monitoring Centre.
• Note the delivery date from the contract and work out when the 12-month period after it would expire.

What We Say About This as an Insurance Agency

RYL Sigorta Aracılık Hizmetleri Limited Şirketi is an insurance agency. The policy is issued by the insurance company and any indemnity paid by it. Because the policyholder is the contractor or seller, the cover is taken out by the project owner, not the home buyer; this article is written for readers on the buyer's side.

The question buyers ask most often is how to verify a seller's claim to have provided security. The answer fits in one sentence: without a certificate issued in your own name, assume no security. We publish the insurers we act for and the authorities they grant us on our dedicated page.

Building completion insurance does its job up to delivery; after that responsibility passes to the homeowner. Land registry and utility transactions call for Compulsory Earthquake Insurance, whose scope we set out here. Contents, theft and escape of water sit with home and business premises insurance.

If you have just taken delivery and want to build the insurance side from scratch, the quotation form is enough; with the title deed and floor area we prepare a comparative quotation.

Frequently Asked Questions

Sources

• Consumer Protection Law No. 6502 — Turkish Legislation Information System
• Regulation on Pre-Paid Housing Sales — Turkish Legislation Information System
• General Conditions of Building Completion Insurance — Insurance and Private Pension Regulation and Supervision Agency (SEDDK)
• Building Completion Insurance Information Guide, July 2025 — Insurance and Private Pension Regulation and Supervision Agency (SEDDK)
• Information on Pre-Paid Housing Sales Contracts — Ministry of Trade of the Republic of Türkiye

This article is for information only; the scope of cover is set by the policy’s specific and general terms.