What is the protection of my belongings worth to me?
Protecting and safeguarding your own belongings should be in everyone's interest. Who has enough in his saving account to be able to restore a severely damaged house or flat in the event of fire, water damage, storms, and so on?
Noticeable climate change
We are increasingly confronted with images of the effects of severe weather conditions. Entire houses are washed away or are buried by mudslides. People are desperately disposing of items destroyed by floods or fighting against time to prevent the all-consuming mud from hardening and making their homes permanently uninhabitable.
There is a growing awareness that climate change is already a tangible threat to the property and way of life of people everywhere. Does this also increase awareness of the need to protect against financial damage with appropriate insurance?
High coverage deficit
Not enough, at least if you take a look at statistics. In most Western European countries, insuring your own home is commonly part of the insurance package. The further east we move on the European map, the lower the insurance density gets. This was also stated in mid-June 2024 by the Secretary General of the Association of Bulgarian Insurers, Nina Koltchakova*. According to her, less than 10% of houses in Bulgaria are insured, and most of these are even mortgaged houses where insurance is required by the lender. At 20%, more houses are insured in neighboring Romania, but this is still a modest figure. In another VIG market, Türkiye, which was hit by a terrible earthquake in February 2023, it is a meagre 14%.
The insurance companies of the Vienna Insurance Group in Türkiye, Romania and Bulgaria reported a significant increase in the number of insurance policies taken out after the earthquake. Although the awareness of the need to protect oneself against risks increases after such drastic events, it is still too low. The insurance density in other CEE countries is much higher: 75% of houses in Hungary, 66% in Slovenia, 63% in the Czech Republic and 60% in Poland are insured, according to the Bulgarian Insurance Association*.
Hope versus safety
Relying on the principle of hope that you will be spared from damage can be very costly and can also jeopardise your existence. Insurance plays an important role in the mechanism for financial recovery from damage to residential property. They also relieve the burden on the public sector and thus the general public, whose financial compensation options are limited anyway. According to the Secretary General of the Bulgarian Insurance Association, property insurance in Bulgaria costs between 25 and 200 euros per year, depending on the size and insurance cover*. This is only a little more than 50 cents per day if you take the upper amount. The further west you go, the more expensive the insurance cover gets, but compared to the costs incurred in the event of uncovered damage, you still pay an extremely moderate amount of a few euros a day for your cover. Which brings us back to the initial question: What is the protection of my belongings worth to me?