The growing number of natural disasters, such as the recent wildfires in California, should make us reflect on how to protect ourselves and seek insurance coverage, said Veselin Angelov, Board Member of the Association of Bulgarian Insurers (ABZ) and CEO of Allianz Bulgaria, in an interview for bTV’s Before Noon program, aired on January 13, 2025. He noted that despite the massive damages in California, U.S. insurers will be able to compensate covered losses, though it may take time. The high level of financial literacy in the U.S. is reflected in the insurance penetration rate—around 78% of homes there are insured. In Bulgaria, by contrast, only about 7–8% of homes are insured, despite the affordable terms offered by insurers. While the average U.S. household pays roughly USD 2,000 annually for home coverage of around USD 300,000, in Bulgaria the average home insurance premium is about BGN 100 for coverage of BGN 100,000.
Angelov pointed out that in Bulgaria, motor insurance remains the most common. Around 25–30% of vehicles are covered by the voluntary “Casco” policy, in addition to the mandatory third-party liability insurance. Clearly, price is not the decisive factor—while “Casco” costs about BGN 500–600 annually for coverage of BGN 10,000, home insurance averages only BGN 100 for coverage of BGN 100,000. Yet, many still choose to insure their cars rather than their homes.
The market offers various home insurance options. For example, policies with a fixed limit provide predefined coverage regardless of the actual value of the property. A home worth BGN 200,000 might be insured for BGN 50,000, with compensation capped at that limit and without applying the rule of proportionality. In the event of total loss, the insured would receive the policy limit.
When signing a home insurance policy, it is crucial to pay attention to the insured sum, Angelov advised. The best practice is to insure the property at its real replacement value. Equally important is to check the coverage and risks included. Standard policies cover Fire and Natural Disasters, while earthquake risk is often offered separately as an optional add-on. In smaller settlements, it is also important that flood risk is explicitly covered.
“The financial risk related to the home is far greater than that of the car. In other words, the cost of replacing a home is many times higher than buying a new vehicle,” Angelov stressed, urging people to reflect on what would be more risky for them—losing their car or losing the roof over their heads.
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