Kyrgyz investors financing residential or mixed-use construction in Türkiye increasingly ask a narrow but important question: what happens to the building itself, and to third parties on site, if something goes wrong before completion. The answer sits in a policy category that is often treated as boilerplate paperwork rather than a real risk transfer instrument: Construction All Risk (CAR) insurance, known locally as İnşaat Sigortası or Tüm Riskler Poliçesi.
What CAR coverage actually protects
A CAR policy is a project-based, not asset-based, instrument. It covers the works under construction, temporary structures, and often the contractor's plant and equipment, against physical loss or damage from causes not specifically excluded: fire, storm, flood, subsidence, collapse during works, theft from an insured site, and faulty workmanship where it causes onward physical damage. A separate but usually bundled section, Third Party Liability, covers claims from neighbors or passersby injured or whose property is damaged by the works. For a Kyrgyz family or company funding a villa, apartment block, or commercial shell in Antalya, Istanbul, or Bodrum, this is the policy that stands between a partially built asset and a total loss if a fire or a heavy storm hits the site before handover.
Coverage period : A properly structured CAR policy runs from the start of site works through practical completion, and frequently extends through a maintenance period of 12 to 24 months to catch defects that surface after handover but relate to construction quality. Investors should confirm the maintenance period is included rather than assumed, since some standard forms exclude it by default and require an endorsement.
Who is named on the policy, and why it matters
In a typical Türkiye build contract, the developer or main contractor purchases the CAR policy, but the investor's interest should be recorded as either co-insured or as a named beneficiary with a loss-payee clause tied to payment milestones already made. Without this, an investor who has advanced stage payments has no direct claim if the site is damaged: the payout goes to the contractor, and recovery of the investor's funds depends on the contractor's solvency and goodwill. This is a standard clause request in DFI-financed and institutional construction contracts elsewhere, and Kyrgyz investors accustomed to project finance discipline should expect the same standard in Türkiye rather than accept it as a negotiable extra.
Sum insured and underinsurance risk
CAR policies are priced against the full reinstatement value of the works, not the contract price paid by the investor. Underinsurance is common when developers set the sum insured at the sale price rather than the actual rebuild cost, which can trigger average clauses that reduce claim payouts proportionally. Investors financing larger unit purchases or full buildings should request the underlying sum insured schedule, not just a certificate of insurance, and have it checked against current construction cost benchmarks for the region.
Earthquake and natural catastrophe endorsements
Türkiye's seismic exposure makes earthquake cover a distinct line item, sometimes excluded from base CAR policies and sold as a separate endorsement (DASK covers completed residential structures for earthquake, not works under construction). Confirming that the CAR policy includes an earthquake and ground movement endorsement, with a sensible sub-limit and deductible, is a specific checklist item rather than an assumption, particularly for projects in first and second degree seismic zones.
Practical due diligence steps
Before releasing stage payments, request the CAR policy document itself, not a summary letter, and verify the insurer, the sum insured, the named insureds, the deductible structure, and the exclusions schedule. A licensed insurance broker or legal advisor familiar with Turkish construction contracts can confirm the policy is active and premiums are current, since lapses for non-payment are a recurring and avoidable failure point on longer builds. Eurasia Experts routinely coordinates this documentation review as part of pre-payment checks for foreign clients building or buying under construction in Türkiye.
For Kyrgyz investors used to bank-led project oversight at home, treating construction insurance as a verified contractual right rather than an assumed formality is a small step that materially reduces exposure during the build period.