Why Your House Insurance Policy Is Overcharged in Northern Cyprus
Most homeowners in Northern Cyprus are not underinsured.
They are insured using the wrong reference point.
That single mistake explains why many house insurance policies cost more than they should, while still failing to protect against the risks that actually matter.
This is not about cheap insurance.
It is about mispriced insurance.
The Core Problem: Market Value Is Not an Insurance Value
In Northern Cyprus, many house insurance policies are priced using market value.
This is the root of the problem.
Market value reflects:
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Land prices
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Demand
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Location popularity
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Speculation
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Foreign buyer activity
Insurance should not be based on any of these.
Insurance is about rebuild cost, not resale price.
Land does not burn.
Land does not flood.
Land does not collapse in an earthquake.
Yet market value includes land by definition.
When that value is used for insurance, the premium is inflated before coverage even begins.
Rising Property Prices Created a False Insurance Baseline
Property prices in Northern Cyprus have risen sharply in recent years, especially in areas such as Bellapais, Girne, İskele, Esentepe, and Long Beach.
Many insurance policies followed this rise automatically.
But construction costs did not rise in the same way, and they did not rise at the same speed.
When insurance values follow market prices instead of rebuild realities, homeowners end up paying higher premiums without receiving additional protection.
This is one of the most common reasons house insurance policies are overcharged on the island.
Market Value Feels Logical. It Is Technically Wrong.
Using market value feels intuitive:
“If my house is worth this much, that’s what it should be insured for.”
But insurance does not compensate market value.
It compensates physical loss.
If a house is destroyed, the insurer pays to rebuild the structure, not to repurchase the land, not to replace the view, and not to cover speculative appreciation.
When market value is used as the insured amount, the homeowner pays for coverage that can never be claimed.
“Full Value Cover” Often Means Full Market Value
Many overcharged policies are sold under reassuring phrases such as:
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“Full value cover”
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“Complete protection”
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“Maximum insured amount”
In practice, this often means the policy mirrors market value rather than rebuild cost.
The result is a higher premium that feels safe, but is structurally inefficient.
More insurance value does not automatically mean better insurance.
Overcharging Often Hides Underanalysis
In most cases, overcharging is not intentional.
It happens because no one separated market value from insurance value.
The right questions were never asked:
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What would it actually cost to rebuild this house today?
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How much of the value is land?
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Which risks are realistic for this location?
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Which covers are irrelevant for this structure?
When these questions are skipped, market value becomes a convenient shortcut.
That shortcut is expensive.
In recent years, this gap has led to a greater emphasis on consulting insurance services, where the focus is not on selling higher limits, but on analysing rebuild cost, risk relevance, and policy structure.
Firms with long local experience increasingly approach house insurance from a consulting perspective rather than a transactional one.
Location Magnifies the Market Value Error
Market value distortion is strongest in:
In these places, land value can exceed rebuild cost by a wide margin.
Insuring the combined figure means paying premiums for something insurance does not replace.
This is why two houses of similar size can have very different premiums, even though their rebuild cost is almost identical.
Why Homeowners Rarely Notice the Overcharge
Overcharging caused by market value is hard to detect because:
The problem usually surfaces only after a loss, when homeowners discover that the insured amount they paid for does not translate into a proportional claim payment.
At that point, the issue is no longer price.
It is structure.
Overcharging Is a Symptom, Not the Disease
High premiums are not the real problem.
Incorrect valuation is.
A properly designed house policy:
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Uses rebuild cost, not market value
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Separates structure from land
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Reflects location-specific risks
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Removes unnecessary coverage layers
When valuation is corrected, premiums usually correct themselves.
A Quiet Shift in How House Insurance Is Being Viewed
There is a slow shift happening in Northern Cyprus.
More homeowners are beginning to ask:
“What am I actually insuring?”
Instead of:
“How much is my property worth?”
That change alone eliminates most overcharging without reducing protection.
Companies with long local experience, such as CAN Sigorta, encounter this pattern repeatedly across different regions and claim scenarios.
Final Thought
If your house insurance in Northern Cyprus feels expensive, the answer is rarely that insurance itself is overpriced.
More often, the answer is simpler:
The policy was built on market value, not on reality.
And when insurance is built on the wrong value, people almost always pay more than they should, for less than they expect.
Free Consultation (During Office Hours)
If you would like to review whether your house insurance is correctly valued,
you can speak with CAN Sigorta during office hours for a free consultation.
📞 +90 392 444 07 77
For continuity outside standard office hours, +90 533 869 82 22 is CAN Sigorta’s YES WE CAN Helpline, available 24/7, including evenings and weekends.
This consultation focuses on valuation logic, rebuild cost, and coverage structure.
No obligation. No pressure.