Property insurance in Bulgaria. Cost and conditions

It is important to insure your property in good time. Whether you need to insure resort property or urban property is up to each person to decide.

According to statistics, insuring real estate in Bulgaria is the cheapest compared with all countries of Central and Eastern Europe.

In Bulgaria the market for arranging insurance when acquiring property is largely determined by mortgage loans that have been taken out — the banks are obliged to indemnify the pledged property.

In Bulgaria only 7% of households are insured, and the average price of annual property insurance is €30. Bulgaria has the greatest potential for growth, and there is a tendency for this share to increase, especially given the whims of the weather and frequent natural disasters.

Recently, insuring overseas property has become more popular among non-residents who own apartments in Bulgaria.

Why should I insure my home

Because insurance works. Whether it is necessary or not depends on us — on whether we will change the stereotype and begin at last to insure the most important elements of our life, namely our roof.

The famous English proverb “My home is my castle” is a relevant mantra for every newcomer.

This investment will protect the home from the consequences of natural disasters — storms, hurricanes, hail, accumulations of snow and ice, floods — and from the human factor — theft, vandalism, arson. 

People often think that expensive locks, security systems, grilles and armoured doors are a sufficient means of protection against thieves. These are preventive measures, not precautionary ones. Under no circumstances will they stop a thief who has decided to burgle your home.

Main types of property insurance

The market offers a wide choice of insurance products. There is insurance for real estate only and for movable property, and there are package products that combine several types of policies. These packages very often combine life insurance, civil liability for damage caused to third parties, and so on.
In the field of housing insurance many companies offer standard packages in which no inspection of the home is carried out and no inventory of property is drawn up — only the insurance limit is set.

In addition to package and standard insurance, companies offer the option to insure only movable or only immovable property. There are also policies for tenants, which are essentially movable-property insurance, as well as for landlords, which can be classified as civil liability cover.

What can be insured

Practically any real estate is subject to insurance: residential houses (apartments), villas, outbuildings, garages, workshops, garden buildings, special types of equipment such as satellite dishes, solar heating systems, greenhouses, mushroom houses, sheds, poultry houses, birds or animals, wells, outdoor fountains, and fences.

Coverage also extends to a very wide range of movable property: general furniture, personal and other household items, household appliances, audio-visual and electronic equipment, solar panels and satellite dishes; money, jewellery, securities, and valuables kept in safes; agricultural equipment — agricultural machinery, inventory, construction equipment, tools, materials, works of art of high artistic value, expensive clothing, leather coats, branded clothing and others.

How much does home insurance cost in Bulgaria

The cost of insurance for an apartment/house depends on the area in which the property is located and on the basis on which you wish to insure it. Home contents insurance is designed in such a way that the consumer has freedom of choice as to the sum insured, and it is in their interest for it to be as close to the actual value as possible.
 
You have the option of insuring your property at its real / market value. Every owner has the most accurate idea of how much their property is worth.
 
Another option is to accept the special calculations per square metre for the corresponding zone offered by a particular insurance company. 
 
For Sofia, insurers have set a minimum sum insured of around 1,000 leva per square metre.
And the last option is to insure your property at a value below the real one — “liability insurance”. This type of insurance is gaining momentum because here you set the limit up to which you wish to insure your home. How much it costs to insure a house depends on the valuation amount, taking into account the budget you can allocate.
 
For example: the market value of your house is 80,000 leva, but in order to reduce the cost of insurance you decide to insure the house for 25,000 leva. This significantly reduces the size of the premium you will pay for the insurance, but the indemnity for damage will be paid within the sum you have chosen — 25,000 leva.
 
Most insurers have ready-made tariffs with sums insured and premiums, from which you simply need to choose the option that suits you. Information about sums insured, premiums, and risks of various insurance companies is already available on the Internet. There you can compare prices and conditions for home contents insurance and conclude an insurance contract. .

Valuable tips from Bulgaria Avenue

Practically all companies run seasonal promotions. The percentage reduction ranges from 35% to 50% and usually lasts from one to three months. According to our observations, most companies run home contents insurance campaigns at the same time every year. This means that with good information you will be able to take out insurance at a very favourable price.

When insuring online, many companies give an additional 10% discount. It is possible to insure your property remotely from Russia, Ukraine, Europe and other countries.

How to insure an apartment or house in Bulgaria:

The market or actual value of the property and the furniture in it is required in order to insure for the real amount. This is important in order to avoid over-insurance and under-insurance.

The aim is to pay compensation in full, so that there is no allowance for moral obsolescence or wear and tear of the property.

The procedure for arranging insurance and the required documents

First of all, you need to choose an insurance company / insurer with the most suitable conditions for you.

An insurer is a joint-stock company, a cooperative, or a branch of an insurer from a third country, licensed and registered by the Financial Supervision Commission. The licence is issued for insurance activity and for specific types of insurance. The company has the right to conclude only those types of insurance that are specified in the licence. It is not permitted for the same insurer to carry out simultaneous property and life insurance, with the exception of accident and sickness insurance. The insurer is not entitled to engage in any other commercial activity.

After the choice has been made — familiarisation with the contract and payment. 

An important tip! Before concluding the contract, the insurer must provide their General Terms and Conditions, which become part of the insurance contract only if the client declares in writing that they accept them. If, after the contract has been concluded, the General Terms and Conditions are changed, the amendment will be valid only if the client has agreed to it in writing.

Required documents: passport / ID card, notary deed of ownership / lease agreement, receipts / invoices for property, tax valuation of the property.

When does the insurance contract enter into force

The moment of entry into force is stated directly in the contract, and if not — you need to study the general terms carefully. When concluded online, the rule is that the contract enters into force no later than 00.00 the following day.

What compensation will I receive?

There are two most common variants of compensation. In the general terms of home contents insurance you can read which compensation option a particular insurance company offers.
 
By reinstatement value.
 
Example: if you bought a TV worth 1,000 leva 2 years ago, the insurer must now pay you compensation in an amount close to what is sufficient to buy a TV with similar characteristics at the current moment..
 
By actual value.
 
In the same example — the insurer will reduce the value of the TV according to the years of operation (with moral wear and tear of approximately 15–20% per year) and pay the difference. Some insurance companies will require you to provide an invoice for the purchase of the damaged property in order to confirm ownership and value. For other companies this is recommended. An insurance broker can help you. They are aware of all the information and can advise.

Should the property be inspected before insurance

No. The law allows insurance company employees not to inspect the home, since this does not affect the payment of compensation within the agreed limits. Current costs and depreciation are also not calculated. In some cases, the Insurer may order an expert appraisal.

Bulgarian insurance companies and their property insurance packages:

In conclusion...

Insurance is a serious matter and deserves a serious attitude. We hope that the information provided has been useful to you and that you have come to the conclusion that insuring your home is important and necessary.

If you have additional questions or need advice, do not hesitate — contact us for a free consultation!