Equity insurance for shared construction. Part 1

Among the many familiar types of insurance, insurance of financial risks in case of shared construction of real estate stands apart. Equity insurance service should not be neglected by the Shareholders. 

Who plans or is already participating in transactions for shared construction of apartments. The essence of insurance fin. risks of real estate investors - in the guarantee of return on investment in shared construction money if the interest holders will not receive in time the housing under construction in the property.

Equity Agreement of Equity insurance

The only insurer can act as the insured, i.e. the one who invested money under the equity agreement (DDU). 

The sum insured (i.e. the liability limit of the insurance company) is usually the price of the apartment under the DDU. 

You can ensure your financial risks in shared construction and for a smaller amount, but certainly not for a large one. 

Not only are the risks insure for apartments purchased under equity agreements subject to insurance. Now part of the residential buildings sold by the Developers according to alternative schemes. Housing-building cooperatives (HBCs) organized and conclude agreements with the Interest-holders on joining the HBCs and pay a share fee (as a rule, the share fee is equal to the price of the apartment). 

In some places, preliminary contracts for the sale of apartments come across, although they are recognized as not legitimate. There is also an investment agreement to raise funds in residential construction.

Financial risks

Financial risks insured by both Shareholders and Preliminary Buyers, and Investors. Not only official Shareholders registered with the Fed. 

True, it is worth making a reservation. This type of Equity insurance is a rarity in the market. Very few insurance companies have it in their cage. 

And of those who have the rules of this type of insurance, literally a few use them. And each of these Insurers makes its reservations and limitations in this type of insurance. 

We will make a short digest on the proposed insurance products in the field of insurance of financial risks of Investors. Two large Equity insurance companies have long been practicing financial risk insurance for shared construction of the real estate

• Ugoria
• Spassky Gate

The peculiarity of the insurance product of Spasskiye Vorota SG is that they take risks only risks in accordance with the DDU. 

Which concluded in accordance with Federal Law No. 214 “On shared participation in construction”. Ugoria very carefully takes insurance risks on facilities that are in low stages of readiness. 

However, the form of the agreement between the Interest-holders and the Developer is unprincipled for it. Unless it does not contradict the current legislation. 

There are several other smaller Insurers, such as Capital Policy and Capital Reserve, which also have similar insurance products. 

As for the insurance procedure and insurance risks, they are approximately the same for all Equity insurance companies. We will talk about it in the second part of our article on the insurance of risks in shared construction.


Read Part 2