Published on and written by Cyril Jarnias
Real Estate in Madagascar: An Expanding Market
Madagascar’s real estate market is rapidly expanding, attracting increasing numbers of investors and property owners eager to benefit from this dynamic market. However, before diving into buying or selling properties, it’s crucial to be well-informed about the mandatory insurance requirements in the country.
Good to Know:
These coverages, which differ significantly from those in other nations, protect not only properties but also investments.
In this article, we provide a detailed comparison of mandatory insurance for real estate in Madagascar to help you navigate this opportunity-rich yet challenging environment with confidence.
Mandatory Insurance for Real Estate in Madagascar
In Madagascar, legislation strictly regulates insurance operations, including specific requirements for property owners and, in some cases, for tenants.
Mandatory Insurance for Real Estate in Madagascar
- Liability Insurance: According to the Malagasy Insurance Code (Law No. 2020-005 and 1999 Code), any risk located in Madagascar must be insured through a policy from a locally authorized company. Liability insurance coverage is mandatory throughout the territory.
- Home Multi-Risk Insurance: Although widely recommended and often required by banks for mortgage loans, it is not explicitly mandatory for everyone but remains strongly advised to cover both the property and liability towards others.
- Construction Insurance (Decennial): For certain types of work or new constructions, specific insurance may be required to guarantee repairs for damages compromising structural integrity or making the building unfit for its purpose. This requirement depends on the type and scale of the project.
| Insurance Type | Mandatory for Owners | Mandatory for Tenants | Legal Basis |
|---|---|---|---|
| Liability | Yes | No | Law No. 2020-005; Art. 60 |
| Home Multi-Risk | Recommended/Sometimes required by bank | No | Banking practice |
| Decennial/Construction | Depending on project nature | No | Sector regulations |
Main Laws and Regulations
- Law No. 2020-005 on insurance establishes the general framework and the requirement that any risk located in the territory must be covered by local insurance.
- The Insurance Code (Articles 60…) specifies the mandatory territorial scope for certain guarantees, such as real estate liability insurance.
Reasons Justifying These Requirements
- To financially protect both the owner and third parties against major incidents (fire, property damage to neighbors…)
- To ensure prompt compensation in case of incidents involving your liability
- To legally secure all real estate transactions by ensuring minimum coverage is active
Implications of Not Having Mandatory Insurance
- Rejection by banking institutions when applying for a mortgage
- Having to personally cover all repairs or compensation following an incident involving your liability
- Administrative or even criminal penalties depending on severity and circumstances
- Major risk of the property being difficult to sell since notaries generally require valid certification during transfer
International Comparison
| Country | Owner Liability | Home Multi-Risk |
|---|---|---|
| Madagascar | Mandatory | Recommended/banking |
| France | Mandatory for co-ownership/rental | Strongly recommended/owner |
| Morocco | Varies by usage | Rarely mandatory |
The Malagasy specificity lies mainly in the generalized requirement tied to the location of the risk rather than the exact status of the owner or tenant.
Practical Recommendations
For new owners/investors:
- Systematically subscribe to at least liability insurance from a locally authorized insurer.
- Also prioritize a multi-risk home insurance policy even if not strictly legally required.
- For new construction or major work, verify if decennial insurance is required.
- Regularly compare offers and guarantees available in the Malagasy market.
Good to Know:
In Madagascar, property owners must mandatorily subscribe to liability insurance to cover damages caused to third parties, as well as fire insurance to protect their property in case of incidents. Malagasy laws, particularly the Insurance Code, specify these obligations aimed at securing properties and preventing costly disputes. Non-compliance can result in significant fines and personal liability for potential damages. Comparatively, countries like France also require home insurance for tenants, highlighting enhanced protection for all involved parties. New owners or investors are advised to choose policies covering a wide range of risks while checking options with local insurers to benefit from the best guarantees suited to the Malagasy market.
Comparison of Home Insurance in Madagascar
| Company | Coverage Types | Price/Accessibility | General Conditions | Additional Services |
|---|---|---|---|---|
| ARO | Home multi-risk, fire, theft, liability, health | Extensive range for individuals and businesses; competitive rates based on customized needs | Clear contracts; adaptation to client profiles (owners/tenants); variable deductibles | Personalized support, network of 28 agencies |
| Ny Havana | Fire, theft, multi-risk home/commercial/NGO/industrial | Modular offers based on profiles (individuals/businesses), affordable prices for basic products | Flexibility in subscription and claims management; recognized market experience | Travel assistance included in some offers |
| Allianz Madagascar | Home multi-risk: movable & immovable property, liability | Innovative & accessible coverage from standard to premium offers | Broad guarantees (fire, water damage…); transparent conditions adapted to local context | Dedicated advisors; advanced digital services |
| Sanlam | Custom home multi-risk: fire, water damage… | Flexible pricing based on insured property value and chosen options | Possibility of annual contract adjustment; deductible tailored to each situation | Additional services like claims support |
| Saham Assurance | Fire-theft-home; Business & individual solutions | Competitive prices oriented towards Malagasy families | Announced fast processing; simple contracts | Administrative assistance in case of claims; dedicated client space |
Concrete Examples of Available Insurance Policies
- ARO “Home Multi-Risk” Policy: covers fires/electrical damage/water damage/theft/vandalism/liability.
- Allianz Madagascar “Home” Offer: comprehensive guarantee including movable and immovable property against major incidents with emergency assistance.
- Ny Havana Multi-Risk Insurance: combined protections for owners or tenants with possible extension to associations or NGOs.
Essential Criteria for Choosing Suitable Home Insurance
- Historical reputation and financial strength (ARO has over 50 years of market experience)
- Customer satisfaction based on responsiveness in claims handling
- Average observed time for compensation after reporting (~15 days for some recognized insurers)
- Extensive network of physical agencies allowing human support
- Clarity and flexibility of general conditions
Specific Legal Obligations in Madagascar
Home insurance is not systematically mandatory except in specific cases:
- Mandatory if required by a landlord or lending institution for a mortgage
- Recommended or even imposed by certain local regulations in co-ownership
Current Trends in the Malagasy Market
- Progressive but still limited development among urban individuals: low penetration rate outside major cities
- Rise of digitalization: online quotes available from Allianz/Sanlam/AFG Assur
- Progressive diversification with increasing inclusion of complementary guarantees such as legal assistance or express repairs
“Leading companies like ARO or Allianz now focus as much on their ability to quickly assist victims as on contract personalization. The average observed time between complete reporting and compensation does not exceed three weeks for these reputable insurers.”
— Madagascar Insurance Sector Analyst
“After a major electrical damage covered by my multi-risk policy with Sanlam-Allianz Madagascar Insurance, I was compensated within fifteen days thanks to a fully digital process.”
— Real User Review (summary)
Summary Checklist for Choosing Home Insurance
- Compare multiple quotes tailored to family/professional/location profile
- Verify actual coverage offered vs. frequent exclusions (example: natural disasters)
- Prioritize a company with strong local presence/solid agency network
- Research through local forums or word-of-mouth from other policyholders
Good to Know:
In Madagascar, home insurance is not legally mandatory but is strongly recommended to cover various risks. Companies like Allianz, Aro, Ny Havana, and L’Olivier are among the major players offering policies with prices varying based on desired coverage, ranging from simple liability to more comprehensive options including water damage and theft. Reviewing general conditions often reveals exclusions such as uncovered natural disasters or deductibles in case of claims. It’s essential to choose insurance based on criteria like the company’s reputation, customer satisfaction regarding claims processing times, and the availability of additional services like 24/7 assistance. Trends show growing interest in digitalized insurance, with offers including risk prevention advice being particularly appreciated. According to experts, a basic option with Ny Havana can start at around 300,000 Ariary per year, while premium offers from Allianz include legal protection services.
Owner Liability: Obligations and Protections
Property owner liability in Madagascar is governed by several legislative texts defining the obligations and necessary guarantees to protect both the owner and third parties. This liability falls within the general framework of Malagasy civil law.
In the Malagasy real estate context, owner liability primarily stems from the Civil Code and specific laws related to immovable property. The owner is held responsible for damages caused by their property, whether material or bodily harm affecting tenants, visitors, or third parties.
Main Obligations of Property Owners
The owner of immovable property in Madagascar has two fundamental obligations:
- The delivery obligation, considered fulfilled when the seller provides the property documents to the buyer and allows them to take possession
- The guarantee obligation, primarily consisting of enabling the buyer to fully enjoy the property
These obligations are clearly defined in Article 15 of Law No. 2017-046, which structures the relationship between the seller and buyer of immovable property.
Types of Damages Covered by Liability
Owner liability generally covers:
- Material damages to third-party property
- Bodily injuries suffered by individuals
- Losses resulting from maintenance or safety defects of the property
In case of dispute, the Malagasy judge is guided by Articles 11 and 12 of the Civil Code for examining and settling liability-related disagreements.
Legal Framework for Liability Insurance
| Insurance Type | Coverage | Characteristics |
|---|---|---|
| Operational Liability | Damages on Malagasy territory | Can be extended in some cases |
| Vehicle Owner Liability | Damages caused by vehicles | Mandatory under Law No. 99-013 |
| Property Owner Liability | Damages related to immovable property | Varies by contracts |
The operational liability guarantee applies throughout the territory of the Republic of Madagascar, with possibilities for extension in specific cases.
Liability Limitations and Prescription
An important aspect to note is the prescription period for liability actions. For example, the liability of the Land Property Conservator cannot be invoked beyond three years after each registration.
Legal Protection for Owners
To protect themselves, owners can:
- Contractually reserve the right to seek resolution of the sales deed in case of payment default
- Obtain a forced mortgage on properties in case of dispute, through a court judgment
- Subscribe to complementary insurance tailored to specific property risks
In the absence of stipulation in the sales deed, the preservation of the resolution action may be granted by court judgment.
For optimal liability management, property owners are recommended to:
- Regularly check their property’s condition to prevent risks
- Document all transactions and interventions on the property
- Consult a legal professional to adapt contracts to their specific situation
- Subscribe to appropriate insurance covering all potential risks
Good to Know:
In Madagascar, property owner liability in real estate is defined by the obligation to guarantee the safety of tenants, visitors, and third parties, in compliance with local legal provisions. Owners must ensure prevention of material and bodily damages, for example by verifying that installations comply with safety standards. Mandatory insurance products generally cover these risks, though it’s advisable to subscribe to additional protections, such as extended guarantees, for more comprehensive coverage. For instance, an electrical installation failure causing a fire could engage the owner’s liability towards damages to tenants. Owners should compare available insurance in the Malagasy market to choose those offering the best protection and regularly review their insurance policies to remain compliant with legal obligations and effectively protect their assets.
Rental Risk Coverage: What Choices in Madagascar?
Rental risks in Madagascar are numerous and require particular attention from both property owners and tenants. The legal framework is defined by Law No. 2015-052 of December 16, 2015, governing relationships between landlords and tenants, particularly regulating lease termination conditions, maintenance obligations, and rent adjustment procedures.
Main Rental Risks in Madagascar
Madagascar presents specific risks related to its geographical and climatic situation:
- Cyclones, particularly on the east and north coasts
- Floods, frequent during the rainy season
- Coastal erosion in coastal areas
- Landslides in mountainous regions
- Locust invasions in some rural areas
The cyclone season generally extends from November to April, with greater exposure in the eastern and northern coastal regions.
Available Coverage Solutions
| Insurance Type | Characteristics | Coverage |
|---|---|---|
| Home Multi-Risk | Protection against natural calamities and damages caused by third parties | Fire and other basic risks |
| Non-Occupant Owner Insurance (PNO) | Covers landlord liability | Recommended for all owners renting their property |
| Rental Risk Insurance | Specific protection for owners | Payment exclusively to the owner of the leased property in case of incident |
Legal and Tax Framework
Rental income in Madagascar is subject to Property Income Tax (IRF) at a rate of 20%. Deductible expenses include management fees, maintenance work, and loan interest.
Recommendations for Optimal Coverage
- Carefully study the history of natural disasters in the region before any purchase
- Verify if the property is located in a risk zone
- Ensure the construction can withstand local climatic hazards
- Subscribe to home insurance specifically covering Malagasy risks
Specifics of the Malagasy Insurance Market
The insurance market in Madagascar is regulated by the Insurance Code, which provides specific provisions regarding rental risk insurance. In case of an incident, the insurer can only pay compensation to the owner of the leased property or to the neighbor involved in a recourse.
Important: Good mastery of legal and tax aspects is essential to secure your rental investment in Madagascar. It’s recommended to consult competent professionals, particularly a specialized lawyer for lease contract compliance and a local accountant for tax optimization.
Setting the rent is a crucial step requiring good knowledge of the local market. Rent set too high may deter potential tenants, thus affecting investment profitability.
Good to Know:
In Madagascar, property owners and tenants face various rental risks, such as material damages and unpaid rents. For protection, rental insurance is available, though not mandatory, unlike minimum policies required elsewhere. Allianz Madagascar and Ny Havana are among the main players offering adapted coverage, with options ranging from fire insurance to rental loss guarantees. Optional plans like multi-risk home insurance offer enhanced protection, including theft and water damage, but can be costly. Subscription often requires prior property assessment, with premiums adjustable based on chosen coverage. Experts advise prioritizing guarantees covering at least the most common property damages while considering local budget constraints. Compared to other regions, offers in Madagascar may be more limited but respond to specific market needs, though they require careful study to avoid unpleasant surprises.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
