New Home Insurance Rates for Earthquake and Natural Disaster Coverage
Public authorities have approved a new revision of the criteria and rates governing compulsory insurance against natural disaster risks, particularly earthquakes. The new system sets insurance premiums according to the seismic zone in which a property is located and the extent to which the building complies with Algeria’s earthquake-resistant construction standards.
The new decision, published in the Official Gazette and reviewed by Echorouk, amends and supplements a previous decision dated October 31, 2004, concerning the criteria and rates applicable to insurance against natural disaster risks.
The tables annexed to the decision introduce a new pricing system that takes into account the level of seismic risk, the structural strength of buildings, and their compliance with earthquake-resistant construction regulations. This means insurance premiums will no longer be the same across all properties and structures.
Under the new provisions, premiums for residential and other properties range from 0.55 to 1.41 per thousand, while rates for industrial and commercial facilities range from 0.37 to 0.94 per thousand, depending on the seismic zone and the building’s compliance with the applicable standards.
In areas classified as Seismic Zone 0, where earthquake risk is considered low, the rate has been set at 0.55 per thousand for properties and 0.37 per thousand for industrial and commercial facilities. In Seismic Zone 1, property rates range from 0.60 to 0.65 per thousand, increasing according to the extent to which buildings comply with Algeria’s earthquake-resistant construction regulations. For industrial and commercial facilities, rates in this zone range from 0.40 to 0.43 per thousand.
Premiums rise further in areas classified as having higher seismic risk. For properties, they reach 1.34 per thousand in Zone 5 and 1.41 per thousand in Zone 6 for buildings that do not comply with Algeria’s earthquake-resistant construction standards, or whose compliance has not been verified.
Conversely, the new criteria provide an incentive for buildings that meet earthquake-resistant construction requirements, with lower insurance rates applying to compliant structures than to those that fail to meet the standards. The measure is intended to encourage compliance with safety requirements and strengthen prevention against natural disaster risks.
The decision also revises the standard price per built square metre, which is used to calculate the value of certain properties. The new benchmark prices range from 38,000 to DZD 50,000 per square metre for collective housing, and from 47,000 to DZD 60,000 per square metre for individual housing, depending on the seismic zone.
The amendment comes as part of a broader review of Algeria’s natural disaster insurance system, which covers earthquakes, floods and other major hazards. The revised framework places greater emphasis on linking insurance costs to the level of risk faced by properties, as well as to the extent to which owners comply with construction and disaster-prevention standards.
