You don't have to actually see the flooded or charred remains of homes on TV to consider buying property insurance. But recent developments may spur you into action. That can only be welcome because protecting your home against disasters – natural or man-made – is an essential preventative measure.
Procedural matters may seem somewhat intricate in Bulgaria. There are various details to consider apart from the language and the legal framework. But do not despair – others have disentangled the bureaucratic threads and so can you!
Property buyers can arrange their insurance in their country of origin or in Bulgaria. The former may seem less cumbersome and easier – linguistically at least – but you would have to find an insurer that covers property in Bulgaria. Price-wise, however, buying a policy here is more attractive.
Under Bulgarian law, acquiring property insurance is optional and can be finalised on receiving your Notary Deed. If buying a new or off-plan apartment, the developer may have included building insurance in the sale price. So scrutinise your contract carefully.
It's always a good idea to ask your real estate agent/property management company for advice and assistance with insurance. Usually, they know the best insurers and have relevant experience. Many of them even have insurance partners – both local and international companies.
You can even make a contract with the realtor/property management company so that they sign insurance contracts on your behalf. In some cases protection against major hazards such as fire, earthquakes, landslides and short circuiting – as well as malicious damage – is included in annual maintenance charges.
Alternatively, contact an insurer yourself. Many local and international companies have offices in major cities such as Sofia, Veliko Tarnovo, Varna or Burgas. You can also ask friends for recommendations or contact other expats, either in person or over the internet.
If you want to conduct a little research, check local insurers' websites, many of which have English versions. To cater to their growing international clientele many companies now employ bilingual staff and produce English-language leaflets and/or documents. Some insurers may also offer free quotes to help you decide.
Building insurance is calculated on the basis of the cost of reconstructing your home, which, in turn, is based on its declared value. Coming from a country such as the UK you may find that insurers here require a much more detailed list of the potential hazards you want included. For example, typical basic cover includes risks from fire, lightning, explosions, earthquakes, storms, floods and landslides. Other policies protect you from vandalism, robbery and burglary. Pay careful attention to your policy's exemptions as well as inclusions.
The cost of your policy obviously depends on the clauses included, the type of the building and sometimes on its location. For instance, some regions in Bulgaria carry an added premium for earthquake risk. A small house may cost around 1,000 leva per year to insure, but premiums are usually higher for holiday homes than for main residences because of their vulnerability to burglaries and general neglect.
Examine all payment details – the currency as well as mode of payment – and note that in cases of burglary, robbery or vandalism you are obliged to inform both your insurer and the police immediately.
Buying property insurance is not simply a responsible act. When you seek a bank loan you will be required to provide proof of the policy for the secured property and confirmation that the annual premium has been paid.
Whether you live in your property permanently or rent it out, you are also strongly advised to consider contents' protection. Your property insurance may cover contents as well. Alternatively, you can take out coverage for valuable items. Coming from the UK, you may find that insurance matters in this respect are somewhat more complicated. You may be asked to provide an inventory of all valuables, with serial numbers for electrical goods. So it could be worthwhile to include only expensive electronics and furniture. Also, note that you will be expected to provide receipts. Some companies are more flexible and will reach an agreed value for your contents.
Household policies usually have strict security stipulations. They may insist you install a burglar alarm before you become eligible to lodge a claim. The price of your contents insurance obviously depends on the building as well as the household items and risks included. However, as a general rule, you can expect to pay an annual premium of around 200-400 leva for a typical two-bedroom flat.
Consider taking out third party, or public liability, for all your family. This can be part of your property insurance or a separate policy and covers you for damage suffered by third parties – for instance, if your dog bites a stranger. This type of cover is particularly recommended if you are letting your property out as it will protect you from any destruction caused by tenants.
Remember, if you value you new Bulgarian home as one of your best acquisitions, never take any unnecessary risks in safeguarding it.