Property insurance in Bulgaria is something that only about 10% from the owners choose to do, even though our home is often our greatest asset. Unfortunately, natural disasters and extreme weather events are becoming more frequent, and the losses from them for 2024 globally amount to 320 billion US dollars, with 19.4% more than the previous year. In Europe alone, natural disasters destroyed assets worth $31 billion, of which only $14 billion was insured.
Home insurance is not just a formality – it is a practical way to protect your property against unforeseen events. In fact, a standard home insurance policy usually covers damage from fire, wind, hail, explosion, smoke damage and criminal activity. In addition, home contents insurance prices can be very affordable for most households and represent a small investment compared to the value of the asset being protected.
In this article, we will look at the most common risks to your property, insurance statistics in Bulgaria, and why home insurance is not just a sensible, but a necessary investment to protect your home and family comfort.
Top risks that property insurance protects you from
Your home is exposed to numerous risks that can cause serious damage. Property insurance protects you from these unpredictable events and provides financial security.
The most common risks that good insurance covers include:
- Fire, lightning and explosion are among the most devastating events that can affect your home. Insurance covers damage from fire, the consequences of extinguishing it, as well as direct and indirect lightning strikes.
- Natural disasters such as storms, hail, torrential rains and floods are becoming more frequent. This also includes landslides, collapses, earthquakes, and the weight of natural accumulations of snow or ice.
- Water and steam accidents are among the most common damages in apartments. Leaks from plumbing, sewage and heating systems can cause significant damage not only to your property, but also to your neighbors' property.
- Malicious acts and vandalism include intentional damage to your property by third parties and burglary.
- Short circuit and electric shock can damage your electrical appliances and installations, especially in older homes where wiring can create electromagnetic fields above WHO recommended standards.
- A hit by a vehicle or the fall of aircraft, their parts or their cargo are also among the risks that standard insurance covers.
Without proper insurance, all costs of restoration after such damage are entirely yours to bear. This can lead to serious financial difficulties, especially in the case of more serious incidents such as fire or flood.
It is also important to always take precautions: close windows and doors when leaving, activate alarm systems, do not share on social networks when you are away for a long time. These simple actions reduce risk and can positively affect your insurance premiums.
How many properties in Bulgaria are insured and why is this a problem?
In a country with about 90% home ownership, Bulgaria paradoxically holds the record for another indicator – less than 10% of homes and agricultural properties are insuredThis fact puts us at significantly greater risk than other EU citizens.
The situation becomes even more worrying when we look at the data on insurance against natural disasters. According to the European insurance regulator EIOPA, in Bulgaria the share of insured properties for all natural disasters has been only 2% over the last 40 years, compared to a ten times higher share on average for Europe – 22%. Bulgaria also remains with the lowest share of property insurance in the entire EU – for 2020 14% compared to 37% average for Europe.
Why don't Bulgarians insure their homes? There are several main reasons:
- The belief that "It won't happen to me.“
- The belief that the state will help in case of disaster
- Insufficient awareness – 67% of respondents do not believe that their awareness of property insurance is sufficient
- Financial considerations – although the price is not prohibitive
Unfortunately, government disaster relief is maximum up to 1000 BGN., which in most cases is not compensation that will return you to your pre-disaster financial situation. In addition, government assistance is received over time, while the insurer pays much faster – usually from two weeks to a month after submitting the necessary documentation.
Between 2010 and 2019, disaster damages in the country amounted to $1.1 billion, which is equivalent to about 0.2% of GDP over the decade. Without insurance, these costs fall on the state budget, businesses and households themselves.
Although studies show that the insurance culture of Bulgarians is increasing, Bulgaria still has a long way to go. According to surveys, the amount that people can set aside annually for home insurance is between 40 and 150 BGN. – a price that is completely affordable for most households, especially considering the potential cost of the damage.
What does good home insurance actually cover?
When considering the structure of good property insurance, it is important to understand exactly what we are protecting. Property insurance typically covers three main areas: the home (the main structure), other buildings on the property (such as a garage or shed), and personal property (furniture, electronics).
Insurance companies usually offer different coverage packages that you can choose according to your needs.
Third-party liability coverage deserves special attention. It is extremely useful if you live in a housing cooperative, because if you flood your neighbors or cause a fire, the damage to the neighbors' properties will be covered by your insurer.
In addition to covering direct damages, good insurance also covers additional costs such as: temporary accommodation, damage limitation costs, repair of damage from burglary and replacement of external locks in case of loss of key.
It is important to note that basic coverage usually only covers real property. For example, if an upstairs flood occurs, it will cover damage to the walls and floor, but not to damaged appliances, unless you have also included coverage for your personal property.
When choosing insurance, carefully review the general terms and conditions, which describe the excluded risks - intentional acts, gross negligence, war, terrorism and others for which insurance protection is not offered.
What does Armeec property insurance cover?
JSC “Armeec” offers several types of property insurance, specially designed for different needs. Protected Home, Protected Family and Protected Property are the main products that the company provides on the Bulgarian market.
Insurance “Safe house” is aimed at residential, holiday and commercial buildings. It covers the following types of property:
- Dwellings in multi-storey buildings (apartments, studios, maisonettes) with adjacent basements and garages
- Houses and villas
- General furnishings, household appliances and personal belongings
- Works of art (with a certificate of authenticity)
- Special facilities such as satellite dishes, solar installations and fences
The insurance covers a wide range of risks - fire, lightning, explosion, natural disasters (storm, heavy rain, hail), plumbing failures, short circuit, vandalism, etc. Additionally, you can add coverage for earthquake, theft by burglary or by technical means.
An important advantage is that in condominium buildings, the owner's share in the common areas of the building is also included. In addition, the company does not require an inventory of movable property when insuring against theft, if the selected limit is up to 15,000 BGN.
All insurance policies of Armeec Insurance Company are distinguished by the lack of deductibles, the possibility of installment payments and quick service in the event of an insured event.
In conclusion
Property insurance is a sensible and affordable investment in the security of your home and family – for a small sum you can protect your apartment worth hundreds of thousands. In Bulgaria, only 10% of properties are insured, which puts a large part of Bulgarians at risk in case of unforeseen events. Unlike limited state assistance, insurers like Armeec offer flexible packages with different levels of protection according to your needs and budget. Additional coverages such as third-party liability can protect you from significant financial losses, especially if you live in a condominium.
Finally, let’s think about it – if we spend money on insurance for our car, why not also protect our home, which is usually a much more valuable asset? Home insurance is not a luxury or an unnecessary expense – it is a necessary tool to protect your financial well-being and peace of mind. Don’t wait for a disaster to happen to realize the value of insurance. Make an informed decision today and protect what you have built over the years.
