Only about 10% of homes in Bulgaria are insured — an estimate the Association of Bulgarian Insurers (ABZ) was still repeating in 2025. Most owners think about a policy only when the bank asks for one with the mortgage, or when the neighbour upstairs has already flooded their ceiling.
Autumn is a good moment to check: the heating season, the storms and the first frosts are all on their way. But insurance also matters at a less discussed moment — when a property changes hands. Here is what Bulgaria's Insurance Code and the Consumer Mortgage Credit Act (ZKNIP) say, and what to look for in your own policy. The provisions were checked as at October 2026.
A home policy usually has two parts with separate limits:
The risks covered are listed expressly in the policy. Fire, natural disasters and failures of the water and electrical installations are usually included. Earthquake, theft and third-party liability (for example, when you flood the flat below) are often add-ons. The rule is simple: a risk that is not written into the policy is not covered.
This is the most important number in the contract, and it is often filled in hastily. The Code distinguishes two values (Art. 400 of the Insurance Code):
Unless the contract says otherwise, the sum insured is taken to be based on actual value (Art. 400(3)). For an older home the difference can be significant: after a loss, new materials and labour cost what they cost, regardless of the building's age.
Bear in mind, too, that an apartment's market price includes its location and its share of the land — things that cannot burn or flood. So the sum insured need not equal the price in the title deed; it should reflect the value of what can actually be damaged.
If the sum insured is lower than the actual (or reinstatement) value, the law in principle protects the owner: the insurer pays the full amount of the loss, up to the sum insured (Art. 389(1)).
The exception is in paragraph 2: if the contract includes a proportional-settlement clause, the payout is reduced in the ratio between the sum insured and the value of the property.
A hypothetical example: a home worth €120,000, insured for €60,000, with €12,000 of water damage.
So when you sign, look for the word "proportional" in the general terms. If the clause is there, the sum insured has to be realistic.
With a housing loan the bank almost always requires the mortgaged property to be insured, usually naming the bank as beneficiary. The Mortgage Credit Act sets two important limits:
In other words, you can compare quotes and choose for yourself, as long as the cover meets the bank's requirements. The steps of the loan process are in our guide to mortgage loans in Bulgaria, and switching banks is covered in our refinancing guide.
Few people know that insurance does not simply lapse when a home is sold. If the insured property is transferred while the contract is in force, the buyer steps into the rights and obligations of the insured (Art. 413(1)). Seller and buyer are jointly liable for any unpaid premium up to that point.
The deadlines to know:
The insurer cannot rely on terms that depart from these rules to the buyer's detriment (Art. 416).
In practice, the seller should hand over the policy along with the other property documents, and the buyer should decide within the first few weeks whether to keep it. If the purchase is financed, the bank will in any case want a policy that meets its own requirements — sometimes it is simpler to take out a new one.
According to the ABZ in July 2025, a typical home policy costs around BGN 100 (≈ €51) a year. The figure is indicative — it depends on size, location, the risks chosen and the sum insured. The cheapest policy often covers little, so compare the cover, not just the price.
Buying, selling or refinancing? Call us or come by the office — we will go through the transaction documents together, insurance included, and tell you plainly what needs to be settled before the notary.
