If you live in Bulgaria permanently, the only compulsory insurance is third-party liability car insurance. However, it’s recommended that you take out, at a minimum, property/building insurance and public liability insurance if you will be letting out your property. You may be required to take out life insurance if you have a mortgage, depending on the amount borrowed. Other voluntary insurances you should have are health, household (contents) and travel insurance.
Building insurance
A small house might cost around €500 per year to insure. Building insurance is based the cost of rebuilding your home, which in turn is based on the declared value (a good reason not to under-declare, by the way). Be aware that in some areas of Bulgaria flooding is common, so always read the small print of any insurance policy to make sure you’re covered.
Note also that most insurance companies divide Bulgaria into three zones according to earthquake risk: the highest risk area (and therefore the area with the highest insurance premiums) is in the west of the country around Sofia, the lowest risk area mostly along the Black Sea.
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Make sure that you insure your property for the cost of rebuilding.
Apartments
If you’re buying a new or off-plan apartment, the developer may offer building insurance as part of the sale price, but it’s more common that insurance is offered as part of the maintenance contract. You should also be insured against public liability in case you cause damage to neighbouring apartments, e.g. through flooding or fire (see Public Liability Insurance below).
Contents
Contents are usually insured for the same risks as buildings and are insured for their replacement value. Depending on the insurance company you choose, you may have to provide an itemised list of all items of value, with serial numbers for electrical goods and receipts for items of value.
Non-Bulgarian insurance companies operating in Bulgaria are usually more flexible and will often reach an agreed value for your contents, although for items of high value (e.g. jewellery and works of art) you will probably have to provide photographs and documentation such as an expert valuation.
When claiming for contents you should produce the original bills if possible (always keep receipts for expensive items) and keep in mind that replacing imported items may be much more expensive than buying them abroad. Note that contents policies usually contain security clauses (e.g. requiring a ‘back-to-base’ alarm, which sounds in a security company’s office, or window shutters) and if you don’t adhere to them a claim won’t be considered.
Holiday Homes
Premiums are generally higher for holiday homes than for main residences because of their vulnerability, particularly to burglaries, and are usually based on the number of days per year a property is occupied and the intervals between periods of occupancy. Cover for theft, storm, flood and malicious damage may be suspended when a property is left empty for a long period.
You may be able to negotiate with your insurance to remove any ‘unoccupied’ clauses if you take out a contract with a management or security company to visit and check the property regularly (e.g. every two weeks or monthly).
Some insurance companies will do their utmost to find a loophole which makes you negligent and relieves them of their liability! Always check that the details listed on a policy are correct and read all the small print.
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Where applicable, it’s important to ensure that a policy specifies a holiday home and not a principal home.
It’s unwise to leave valuable or irreplaceable items in a holiday home or a home that will be left vacant for long periods.
Insuring Abroad
It’s possible and legal to take out building and contents insurance in another country for a property in Bulgaria. The advantage is that you will have a policy you can understand and will be able to handle claims in your own language.
This is often a good option for the owner of a holiday home in Bulgaria, although it can be much more expensive than insuring with a Bulgarian company, so it pays to compare premiums. It can also be much simpler to apply for contents insurance with a company outside Bulgaria, as they will usually insure for an agreed value, rather than asking you to provide receipts for all items you wish to insure (which can be difficult if you’re moving into a furnished property).
Claims
If you need to make a claim on a household policy, you must usually inform your insurance company in writing (by registered letter) within two to five days of the incident (depending on the company) or within 24 hours in the case of theft. Thefts should also be reported to the local police within 24 hours, as the police statement, of which you receive a copy for your insurance company, is required when submitting your claim.
If you have insurance with a non-Bulgarian company (e.g. in the UK) you will probably have to send an English-language translation of the police statement with your claim. Check whether you’re covered for damage or thefts that occur while you’re away from the property and are therefore unable to inform the insurance company immediately.
Public liability insurance
You should take out public liability (also called third-party liability) insurance for all members of your family, either as part of your property insurance or as separate cover, particularly if you will be letting your property.
This covers you for damage done or caused to third parties by you, your children, your tenants and even your pets, e.g. if your dog bites someone – although where damage is due to negligence, benefits may be reduced. You can take out public liability insurance with a non-Bulgarian insurance company, although you should always check exactly it covers you for.
If you’re letting a property, make sure that you’re covered for public liability in respect of your tenants, as most Bulgarian home insurance policies exclude this. If you let through an agent, he may have cover for people renting your property, but this may cover only against harm caused to a person by the property (e.g. a door shutting on someone’s fingers), as opposed to any damage a tenant may cause to the property. Otherwise, your only option is to take out insurance abroad.
Rented accommodation
If you plan to rent accommodation, it’s worth taking out public liability insurance that includes damage you accidentally cause to the property and to other properties, e.g. due to floods, fire or explosion. Some travel insurance policies include this.
Household insurance
Household insurance in Bulgaria is a fairly new concept and can be complicated to arrange, although there are a number of foreign-owned companies in the market providing insurance similar to that offered in Western countries.
Building and contents insurance are normally offered separately; all-risk or multi-risk insurance isn’t yet commonly available and in many cases you will need to specify exactly what you wish to insure against (e.g. fire, flood, earthquake).
A basic policy might cover you only for damage caused by fire, lightning, explosions and falling objects (e.g. trees), and you may need extra or extended cover for other risks. If you’re insuring with a company in another country (e.g. the UK), you will usually be able to take out a multi-risk policy, although the cost will be higher.
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It’s vital to ensure that you have sufficient insurance when visiting your home abroad, which includes travel insurance, car insurance (including breakdown insurance), building and contents insurance, public liability insurance and health insurance.
This article is an extract from Buying a Home in Bulgaria
from Survival Books.