I N S U R A N C E

One of the safest and comparatively cheap ways of good property protection is the building insurance. Behind the varied offers of insurance companies we can discern two basic types of insurance – of the building and of the furnishing. Insurance of movable property practically includes all that is part of the building equipment and fittings: furniture, electrical appliances, computer technique, i.e. all a modern home cannot do without. But no matter how valuable your stamp collection is, your precious stones, shares or any documents, the proper place to keep them is in the bank safes. Least of all because no company wishes to insure such belongings if they are kept at home.

The insurance “Damage to Property” is usually contracted against risks like burglary, robbery, fire or calamity. Its price varies between 20 and 30 lv. with the different insurance companies. In case of full coverage however the price can reach up to 50 lv. The very compensation depends on the type of insurance event. E.g., for damage inflicted to house equipment the client can receive on the average between 3000 and 6000 lv. But for damage caused by burglary up to 2000 lv. If the apartment is renewed and expensively furnished, the insurance premium can reach from 60 to 90 lv.. Then the sum paid by the insurance agent can be from 10 000 to 40 000 lv.

When the insurance is renewed upon contract expiry the clients usually receive a premium discount. The precise price however depends on the market policy of each different firm, on the apartment parameters and on the coverage the client chooses. Building insurance is usually contracted with the person who possesses the ownership documents. Yet, this can be done with the tenant or with the person who bought the building on lease or owns some shares of it. Some insurance agents offer in addition to the building insurance “Civil Responsibility“, which covers losses, suffered by third parties when the insured property has incurred damage. Users should not forget that when they buy accommodation via mortgage they are obliged to insure it. Interest rates and conditions of the insurance “Property “are different with the different banks. Before contracting an insurance the client should be in the clear about his property assessment. The latter can be made by an expert supported by an insurance firm, the service is charged.

To avoid a conflict between insurance agent and client the experts always advise clients to carefully read the general conditions of the contract. Clients should know what exactly they are insured against and what compensation they are entitled to. It is important to pay attention to all exceptions which do not allow compensation claim although such exceptions are often either typed with very small characters or written completely incomprehensibly.

Frequently insurance agents state they do not pay compensation if the construction work is of poor quality. Purely hypothetically, it turns out, for instance, that the balcony has inclination which does not let the water flow out and hence the apartment is flooded. In practice there are cases when the insurance agent refuses to pay compensation for the above reason though the insurance is against flood. It should be noted however that the insurance agent is absolutely right not to contract “ Burglary “ or not to pay the compensation if the building was not locked or if the person insured did not follow the indicated safety measures. The same is valid for insured risk “Earthquake” when further building reconstructions were carried out leading to enhanced risk level.

Property Insurance

Many licensed insurance companies offer different types of property insurance. Object of insurance can be immovable (residential buildings, holiday homes, offices, farm buildings) or movable properties (furnishings, technique and appliances, farm property, machines and facilities, etc.) of firms, organizations and citizens.

The basic risks covered by property insurance are as follows:

• fire and consequences of extinguishing the fire;
• natural calamities – storm, hail, heavy rain, flood, damage caused by snow or ice or frost;
• earthquake;
• lightning, explosion, crash or fall of manned flying vehicle;
• sewerage accidents;
• arson;
• burglary;
• ill-intentioned acts of third parties – breaking glass, shop windows, promotion signs, labels, etc.
• damage resulting from vehicle crash;
• slide or collapse of earth layers, subterranean waters;
• damage from sea wave action;
• impact/sound wave;
• strikes or civil turbulence.

The insurance sum is usually determined by the Insuree and depends on the property value. The price of insurance ( the insurance premium ) is determined by the Insurer depending on the property type and characteristics, the insurance sum , the selected coverage and term of insurance.

In case of damage it is necessary that the Insuree should inform the Insurer within 24 hours.
The Insuree must not undertake action that could increase the size of damage. Harm is established via survey by representatives of the Insuree, the Insurer and an independent expert.
The insurance compensation is defined within the insured sum or according to the limit of responsibility. In case of total damage the size of the harm is equal to the real value of the damaged properties but it cannot exceed their insurance sum. In case of partial damage the harm is determined depending on the expenses needed to restore the property to the looks and state it used to be in right before the event.
The compensation is usually paid within 15 days upon submission of all documents necessary to prove the event and to define the size of damage.

Credit Consultation

To ensure a maximally good service for its clients Address Property works in close cooperation with CREDIT CENTRE providing consultations and assistance for credit allotment.

About Address Credit Centre:

It is a company with over 3-year experience on the market of granting mortgage credit. Partners of Address Credit Centre are 13 leading commercial banks and 2 financial companies.

Credit Centre constantly researches the dynamics of the credit market to ensure the most competitive credit deal, which will meet the conditions and requirements of the client. Working on a large scale the Centre employees manage to negotiate preferential conditions for their clients.
Currently over 50 credit consultants work for the company nationwide. In each Address Property office you can find a qualified consultant of Credit Centre who will help you make the right choice.

Services Offered:

• Consultation with an Address expert and preliminary assessment of your possibility to obtain credit.
• Defining the maximum credit size which can be granted by banks.
• Selection of bank and specific parameters – term, liquidating plan, interest rates.
• Assistance with completion and collection of documents required by the banks.
• Control over obtaining the bank decision.

What the Client Benefits From Credit Centre:

• You use all the services of Credit Centre ABSOLUTELY FREE.
• Consultation on credit parameters – term, interest rate, currency, type of liquidating plan.
• You save time and money needed to gather information from the bank credit market.
• Clear and correct presentation of all credit parameters.
• You get the credit terms of 13 banks in one office.

For Contacts:

Please address all your inquiries regarding Credit Centre to Address – Bansko on telephone 0889-305208 or Email: vberberova@address.bg

Property Assessment

Expert property assessments are usually used when taking investment decisions, property sale-trade, obtaining credit and determining the insurance value of a certain building. Three of the most frequently applied methods of property assessment are as follows: expenditure method, market analogue method and income method.

1. EXPENDITURE METHOD
   This method calculates the price of erecting the building according to current pricelists of materials and services used. Then it deduces amortization for the period of existence of the building. Another important parameter is the market value of the plot the building is constructed upon. It is determined after comparing land prices in the same area from other sale-trade deals executed in the last few months. Property assessment via the expenditure method is obtained as a sum total of the armotized building value and the market plot value.
2. MARKET ANALOGUE METHOD
   This method is based on the comparison principle, i.e. the property assessed costs as much as a property with the same quality of construction work, facilities, functionality, position, access, etc.. It is applicable only in case of available information about deals with similar properties.
3. INCOME METHOD
   The basic quantity needed to calculate the value of a property via the income method is the norm of capitalization. It is determined by the market and it is an indicator of its development level and liquidity as well as of the risk for investment in that type of property. Depending on whether the property is used by its owner or let for lease, two techniques can be applied – of direct capitalization and of discounted money flows.
   • DIRECT CAPITALIZATION is applied when owner used property is assessed. Then the expenses related to building maintenance are deduced and the potential operating property profit is received. This benefit is capitalized via the norm of capitalization for that type of property.
   • DISCOUNTED MONEY FLOWS are used as an assessment technique when the object of assessment is a building which offers space for rent. 10-year prognoses for future operating property profit are usually made. After discounting with an appropriate capitalization norm we receive the value of the building by means of the income method.
   • FAIR MARKET VALUEAfter assessing the property via the three methods the evaluator has to calculate the fair market value of the property. This can be done through selecting the value obtained via one of the methods or through calculating the mean value of all assessment methods used.

Change of Farmled Status

Changing the function of farmland into industrial or residential building area is done following the procedure prescribed by the Bulgarian legislature:

1. Announcing investment intentions regarding a particular property in The Official. Newspaper or the regional press.
2. Statement of the Regional Inspectorate for Environment Preservation ( RIEP ).
3. Permission of the town mayor for carrying out the procedure.
4. Act for discarding perennial plants if there are such enlisted in the property document.
5. Project work. It includes several projects – Geodesy, Architecture, Sewerage, Electrical and Road Communications.
6. RIEP statement as regards the project developed.
7. Project approval by the Town Council.
8. Payment of fees specified by the Town Council and connected with the type of settlement.

Upon completion of the procedure the property acquires the state of regulated landed property ( RLP ). Construction work in compliance with the approved project can now be carried out.