Property insurance in georgia: what you can insure and how to get a payout if something happens

Property insurance is a contract with an insurance company under which the insurer undertakes to pay compensation if the insured property is damaged or destroyed as a result of an event specified in the policy.

The key words here are “specified in the policy.”

The mere fact that you have insurance does not mean that any damage will be compensated. It is important to read:

• What exactly is insured;
• Against which risks;
• What exclusions apply;
• Who the beneficiary is;
• What the sum insured is;
• What the deductible is;
• Within what time frame you must report an insured event;
• What documents will be required for a payout.

In Georgia, insurance activities are regulated by the Law of Georgia “On Insurance,” and the relations between the parties under an insurance contract are also governed by the general rules of civil law.

Yes, they can.

The Law of Georgia “On Insurance” expressly provides that foreign citizens, stateless persons and legal entities with foreign capital operating in Georgia are insured with Georgian insurance organizations in accordance with the legislation of Georgia and have the same rights and obligations in the field of insurance as citizens and legal entities of Georgia.

In practice, this means that a foreigner can insure property in Georgia if they have a legitimate interest in such insurance. For example, they are:

• The owner of an apartment, an apart-hotel unit, a house, or a car;
• A tenant who wants to insure their movable property;
• A borrower under a mortgage loan;
• A business owner insuring premises, equipment or goods;
• The owner of an apartment that they rent out.

Usually the insurance company will ask for a passport, contact details, information about the object, documents on the property, or other information that allows the risk to be assessed.

1. An Apartment, House or Apart-Hotel Unit
You can insure real estate: an apartment, a private house, apart-hotel units, and sometimes commercial premises.

Here it is important to consider the legal and actual status of the object. For example, “apart-hotel units” in Georgia may be sold as residential premises, or may be part of a hotel or commercial project. For the insurer this can matter: some products are designed only for property used for living.

Before buying a policy, you need to clarify:

• Whether the real estate object itself is insured;
• Whether interior finishing is included;
• Whether engineering utilities are included;
• Whether coverage extends to a balcony, terrace, storage room, parking;
• Whether damage from water, heavy rain, neighbours, or common building pipes is covered;
• Whether the policy is valid if the apartment is rented out.

For example, the TBC Insurance property information sheet states that a policy may include two sections: property insurance and third-party liability insurance. Among the risks listed are fire, lightning strike, explosion, smoke damage, theft with unlawful entry, robbery, armed robbery, vandalism, hail, flood, strong wind, sudden and unexpected failure of pipelines, water damage from adjacent premises, as well as specific cases involving common water-supply and sewage pipes.

2. Renovation and Finishing
For an owner, what often matters is not the “walls” as a structure but the renovation: floors, ceilings, built-in furniture, doors, windows, plumbing, wiring, heating, air conditioning.

You need to check whether finishing is included in the coverage. Sometimes a basic policy covers only structural elements, while renovation, furniture and appliances are insured separately or within a separate limit.

You should read especially carefully the conditions regarding:

• Balconies and terraces;
• Basements and semi-basement premises;
• Parking areas;
• Objects below ground level;
• Objects in new developments where construction work is still ongoing;
• Apartments that have already had insured events in the past.

With some insurers, flood damage for basements or semi-basements may be excluded. Construction defects, wear and tear, corrosion, damp, and old or dilapidated buildings are also often not covered.

3. Movable Property
You can insure property inside an apartment or house:

• Furniture;
• Household appliances;
• Electronics;
• Interior items;
• Personal belongings;
• Sometimes equipment, if it concerns a business.

But exclusions matter here too. Usually insurance companies do not cover, or cover only by special agreement:

• Cash;
• Securities;
• Precious metals and stones;
• Antiques;
• Collections;
• Paintings, sculptures and other works of art;
• Documents;
• Software and data;
• Food products;
• Animals and plants;
• Property that is in the apartment but does not belong to the owner.

If there is expensive property in the apartment, it is better to list it separately in the policy or an annex to it, state its value and support it with documents.

4. Third-Party Liability
This is a very useful but often underestimated section.
For example, a pipe bursts in your apartment and floods the neighbours below. Or your property causes damage to someone else’s property. In such a case, liability insurance may cover not your own renovation but the amount you have to pay to third parties.

For landlords this is especially important. If the apartment is rented out, you need to separately check whether the policy covers:

• Damage to the tenant’s property;
• Harm to the tenant’s health;
• Damage to neighbours;
• Damage caused by the tenant themselves;
• Cases where the apartment is used not by the owner but by third parties.

In some products, insurance for an apartment that is rented out is valid only if the corresponding note is expressly made in the policy.

5. A Car
For cars, separate insurance products are usually used:

• CASCO - voluntary insurance of your own car against damage, theft and other risks;
• Liability insurance - covers damage caused to third parties;
• Mandatory liability for foreign-registered vehicles - if the car is registered outside Georgia and used within Georgia.

The Law of Georgia on mandatory civil liability insurance of the owner of a vehicle registered in a foreign state applies to Georgian citizens, foreigners and stateless persons if they drive such a vehicle in Georgia.

If the car is registered in Georgia, you need to separately clarify exactly which product you are buying: insurance of your own car, liability insurance, or an extended package.

Not always.

With a mortgage, the bank usually requires the real estate object to be insured, because the apartment or house serves as collateral. Such insurance primarily protects the bank’s interest: if the object is damaged or destroyed, the bank retains financial security.

But for the owner, mortgage insurance may be insufficient.

Before assuming that the “apartment is insured,” you need to check:
1. Who the beneficiary under the policy is. If the beneficiary is the bank, the insurance payout may first go toward repaying the loan or restoring the collateral property.
2. What exactly is insured. Only the structure? Or also the renovation, finishing, furniture, appliances?
3. Which risks are covered. Fire, explosion, earthquake, flooding, strong wind, water from neighbours, theft - all of this needs to be checked against the text of the policy.
4. Whether there is liability insurance toward neighbours. Mortgage insurance often does not resolve the issue if you flood someone else’s apartment.
5. What the sum insured is. It may be tied to the outstanding loan balance rather than to the real value of the object and the renovation.
6. What the exclusions are. The insurer may refuse if the damage arose from a construction defect, unauthorized reconstruction, wear and tear, damp, renovation, or gross negligence.

Bottom line: mortgage insurance is good, but it should be viewed as minimum protection. For proper protection of the owner, a separate or extended policy is often required.

Georgia has a licensed insurance market. According to the State Insurance Supervision Service of Georgia, 19 licensed insurance companies operate in the country, holding licenses for life insurance and/or other types of insurance.

Among the companies whose products are worth checking when choosing insurance for property, vehicles or liability:

• TBC Insurance;
• Aldagi;
• GPI Holding;
• IRAO;
• Euroins Georgia;
• Imedi L;
• Alpha;
• Autograph / Ardi;
• Other licensed insurance companies.

This is not a ranking and not a recommendation of any specific insurer. Terms, tariffs, exclusions and the quality of claims settlement should be compared for each product separately.

It is worth checking not only the price of the policy but also:

• The list of risks;
• The exclusions;
• The deductible;
• The payout limits;
• The notification procedure;
• The documents required for a payout;
• The review time frames;
• The ability to insure a rented-out apartment;
• The presence of third-party liability;
• The language of the contract and policy.

1. What Exactly Counts as Insured Property
The phrase “apartment insurance” can mean different things. Sometimes it is only the structure, sometimes the structure plus the renovation, and sometimes the movable property as well.

It is better to ask the insurance company directly:

• Whether interior finishing is covered;
• Whether built-in furniture is covered;
• Whether household appliances are covered;
• Whether parking is covered;
• Whether a storage room is covered;
• Whether property on the balcony is covered;
• Whether the tenant’s belongings are covered;
• Whether engineering networks inside the apartment are covered;
• Whether common building pipes are covered.

2. Which Risks Are Included
For Georgia, the practically important ones are:

• Fire;
• Explosion;
• Water damage;
• Water from neighbours;
• Damage due to common building pipes;
• Heavy rain, flood, strong wind, hail;
• Theft and vandalism;
• Liability toward neighbours.

If you live in a new development or are buying an object during the construction stage, separately check the risks related to construction defects. Very often insurance companies do not cover such defects.

3. What Exclusions Apply
Exclusions are the most important part of the policy.

For example, the insurer may refuse to pay compensation if the damage is related to:

• Wear and tear;
• Corrosion;
• Damp;
• A construction or engineering defect;
• Unauthorized reconstruction;
• Renovation or construction work;
• Gross negligence of the owner or their family members;
• Pre-existing damage;
• The emergency (dilapidated) condition of the building;
• Property that does not belong to the policyholder.

This does not mean insurance is useless. It means you should buy it understanding what it actually protects against.

4. Deductible
A deductible is the part of the damage that the policyholder pays themselves.

For example, if the deductible is 5% but at least 150 GEL, then in the event of a claim part of the sum will be withheld from the payout. The TBC Insurance property information sheet specifies the deductible: for the property insurance section - 5% of the loss, at least 150 GEL per case; for third-party liability - 150 GEL per case.

The lower the deductible, the more expensive the policy usually is. But too high a deductible can make the insurance pointless for small losses.

5. Notification Time Frames
Almost every policy requires you to promptly notify the insurer of an insured event.

The TBC Insurance terms state that in the event of a claim you must immediately, within a reasonable time, notify the insurer via the hotline, and written notification must be submitted within 72 hours after the case has been logged on the hotline.

Other insurers may have different time frames. But the general principle is the same: first notify the insurer, then carry out repairs - unless urgent repair is needed to prevent greater damage.

If the property is not insured, this does not mean the damage cannot be recovered. But the path will be more difficult: you need to identify the responsible party and prove the amount of the losses.

For example, if an apartment is flooded because of a neighbour, the claim can be brought against the neighbour. If a parking garage is flooded due to a defect in the storm drainage, waterproofing or drainage, the issue may potentially lie with the developer, the management company or the homeowners’ association. If the damage arose from poor-quality construction, you can raise the question of a construction defect and the inadequate quality of the object.

A practical course of action:
1. Record the damage. Photos, video, date, time, a general view, close-ups, correspondence with the management company, neighbours, the developer.
2. Draw up a report (act). Preferably by a commission: the owner, the management company, the homeowners’ association, a developer’s representative, neighbours.
3. If no report is drawn up - call in an enforcement officer. In Georgia, enforcement officers can record factual circumstances. This is important if the other party later denies the very fact of the damage.
4. Establish the cause. A specialist is needed: an engineer, a construction expert, an appraiser. Without the cause, it is difficult to determine against whom to bring the claim.
5. Assess the damage. A repair estimate, an appraiser’s report, invoices, quotes from contractors.
6. Send a formal claim. To the responsible party: the neighbour, the developer, the management company, the homeowners’ association.
7. If they do not compensate voluntarily - go to court. In court you can demand compensation for losses, elimination of the defect, a price reduction, and in serious cases raise the question of the inadequate quality of the delivered object.

The difficulty of this path is that the owner themselves bears the costs of the expert assessment, the lawyer and the court proceedings, and receives compensation only after a voluntary settlement or a court decision.

If the property is insured, the course of action is different: the main task is not to lose the right to a payout.

1. Immediately notify the insurance company. Call the hotline, register the case, obtain a reference number.
2. Clarify what you may do before the inspection. A common mistake is to quickly clean everything up, dry it out, throw away damaged items and start repairs. Then the insurer cannot assess the damage and refuses or reduces the payout.
3. Preserve the damaged property until the inspection. If possible, leave everything in the state it was in after the event. If you urgently need to deal with an emergency - for example, shut off the water or prevent further flooding - record every action with photos and video.
4. Call in the competent services. In case of fire, explosion or flood - the relevant emergency or rescue services. In case of theft, robbery, armed robbery or vandalism - the police.
5. Prepare the documents. Usually required: the policy, documents on the property, photos and video, the report (act), certificates from the services, the damage assessment, invoices, bank details.
6. Do not verbally agree to a sum if it is unclear. Ask for the calculation of the insurance payout: what is included, what is excluded, what deductible was withheld, on what grounds the sum was reduced.
7. If refused - analyse the refusal. A refusal by the insurer is not always final. You need to check whether the case really is not covered by the policy, whether the notification deadlines were met, whether the exclusions were applied correctly, and whether the damage was calculated correctly.

The TBC Insurance information sheet states that the insurer makes a decision on the payout and its amount within 10 working days of receiving the full set of documents required to establish the circumstances of the insured event and the amount of damage. The payout is made by bank transfer in GEL within 3 working days after the settlement act or remote settlement is signed.

Other insurers may have different time frames, so these should be checked in the specific policy.

Insurance is useful, but it does not solve all problems.

If an apartment is bought in a building with serious construction defects, the insurer may refuse to pay precisely because the cause of the damage is a construction defect or a defect in the engineering systems. Then the question again returns to the developer, the designer, the contractor, the management company or the homeowners’ association.

That is why the best approach is not to choose between checking the object and buying insurance, but to use both tools.

Before buying real estate, it is worth:

• Checking the developer;
• Studying the permit documentation;
• Checking the legal status of the object;
• Reading the contract carefully;
• Recording the quality of the object at handover;
• Not signing the acceptance certificate with the phrase “no claims” if there are claims;
• Assessing the need to insure the apartment, the renovation, the property and liability.

We wrote in more detail about checking new developments in Georgia in the JUST Advisors article: How to buy property in a new development in Georgia without turning your investment into a pile of concrete.

Before paying for a policy, ask the insurance company these questions:

1. What exactly is insured: walls, renovation, furniture, appliances, parking, storage room?
2. Is damage from water, heavy rain, neighbours, or common building pipes covered?
3. Is liability toward neighbours covered?
4. Is the policy valid if the apartment is rented out?
5. Who receives the payout: the owner, the bank, another person?
6. What is the sum insured?
7. What is the deductible?
8. What are the exclusions?
9. Within what time frame must an insured event be reported?
10. What documents are needed for a payout?
11. May renovation begin before the insurer’s inspection?
12. In what language is the policy and its terms drawn up?

If the answers are vague, it is better not to settle for a manager’s verbal explanation but to ask for the written terms.

Property insurance in Georgia is not a formality or “excessive anxiety.” It is a normal tool for protecting an owner, a tenant, a mortgage borrower and a business.

But a good policy is not simply the cheaper one. A good policy is the one that matches your real risk: your apartment, renovation, parking, rental arrangements, car, mortgage and the property inside the object.

JUST Advisors helps to check real estate before purchase, analyse contracts with developers and insurance terms, prepare claims, and provide support in disputes over construction defects, flooding, damage to property and refusals by insurance companies.