Ten-Year Insurance for Home Builders Becomes Mandatory in the Country: Learn About the Scope of the Policy
The deadline for all new home builders in the country to obtain the Ten-Year Insurance, which seeks to protect the assets of the buyers of said properties, but also the developers of those projects and the promoters, against the risks of ruin caused by design errors, material defects, soil defects, or construction faults for a period of 10 years, is July 1st.
This was announced by Gustavo Morales Covo, president of the Colombian Federation of Insurers (Fasecolda), after reporting that as of last May, 522 projects had been insured in the country, representing approximately 81,355 residential units. Of these, 51,752 correspond to Low-Income Housing. (VIS), 25,228 to Non-VIS and 4,375 to Priority Interest Housing (VIP), with a total insured value exceeding 12.4 billion pesos.
The insurance industry indicated that 1,064 new projects are expected to begin in the next 24 months, bringing 187,885 additional homes to the market. Of these, 471 will be VIS (low-income housing), 72 will be VIP (low-income housing), and 520 will be non-VIS (low-income housing). The estimated average price for these new units is 311 million euros, with an average area of 67.9 m².
As you may recall, the origin of this mandatory insurance for the construction sector is the Safe Housing Law (Law 1796 of 2016), which in turn was designed and enacted after the collapse of tower six of the Space residential project in Medellín , which consisted of six towers located in the El Poblado neighborhood of the Antioquia capital.
Due to structural problems, tower six of the project collapsed in 2013, forcing authorities to order the demolition of the remaining units. Conceived as a luxury complex, Space became a symbol of construction failures and negligence in engineering and construction in Colombia.
With the enactment of the regulation, its implementation has been gradual in the country's major cities. Since January 1, 2022, this insurance has been mandatory for new construction in Bogotá, Medellín, and 33 other nearby municipalities. Then, starting July 1, 2024, the obligation was extended to Barranquilla, Bucaramanga, Cali, Cartagena, Cúcuta, and 36 neighboring municipalities.
This is what the rubble of the Space Needle building looked like two days after it collapsed. Photo: Guillermo Osa. EL TIEMPO Archive
"With the Ten-Year Insurance, the country is taking a decisive step toward a culture of prevention in construction. This insurance not only protects the buyer, but also incentivizes builders to meet the highest technical and structural standards," said Gustavo Morales, CEO of
It is important to keep in mind that the obligation to have this type of insurance does not apply to all projects equally , since it depends on the date on which the corresponding construction license was filed, according to Decree 1617 of 2023.
According to information provided by Fasecolda, based on data from Camacol's Urban Coordinate, approximately 1,725 housing projects are currently under development in Colombia, representing a total of 349,068 housing units. Each unit has an average value of 292 million pesos and an average area of 69.3 m².
Nine key insurance topics- As explained by the insurance association, the Ten-Year Insurance covers only the construction of new housing, regardless of whether it is VIS, Non-VIS, or VIP.
- Once the policy is issued, its coverage is for ten years following the issuance of the Technical Certificate of Occupation (CTO), that is
- That is to say, when the property is delivered, it is protected from the first day.
- Insurance must be purchased by the builder or project developer.
- This insurance cannot be cancelled or modified by the parties during its validity.
- Among the characteristics that housing must have to be covered by the policy are horizontal property ownership, closed real estate units, individual subdivisions, or any other system, including mixed-use projects that generate five or more housing units.
- To verify whether a new home has or will have ten-year insurance, the buyer can consult the Single Insurance Registry (RUS) at www.rus.com.co.
- All new home buyers should ask the builder if the home has or will have a Ten-Year Insurance Policy.
- Currently, eight insurance companies offer this policy (Aseguradora Solidaria, AXA Colpatria, Seguros Mundial, SBS, Seguros Alfa, Bolivar, Previsora, and Sura).
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