Comparison of Mandatory Real Estate Insurance in Hungary

Published on October 4, 2025 and written by Cyril Jarnias

Investing in Hungary: Mandatory Real Estate Insurance

Hungary, a country experiencing rapid economic growth, is attracting an increasing number of real estate investors drawn by its dynamic market and attractive prices. However, before taking the plunge and investing in this promising sector, it’s crucial to fully understand the various mandatory insurance policies that regulate this field, ensuring not only property security but also the safety of those involved.

This article provides a detailed comparison of these insurance policies to better guide future owners and investors in their procedures, decoding Hungarian specifics that could influence your decisions.

Understanding Home Insurance Requirements in Hungary

In Hungary, home insurance isn’t legally mandatory for everyone, but certain situations impose specific obligations, primarily on tenants.

Types of Mandatory Home Insurance and Associated Conditions:

• Property Owners
  • No regulation imposes mandatory home insurance for owner-occupiers, whether for primary or secondary residences.
  • Exception: when taking out a mortgage, banks almost systematically require subscription to home insurance covering at minimum major risks (fire, explosion, water damage).
• Tenants
  • Legal obligation to subscribe to insurance covering at minimum “rental risks” (fire, explosion, water damage caused to the rented property).
  • This obligation doesn’t apply to employer-provided housing or seasonal rentals.

Main Coverage Required Under the Obligation:

Coverage Type	Description	Mandatory For
Rental Risks	Fire, explosion, water damage caused to the property	Tenants
Liability Insurance	Damages caused to third parties by the tenant	Often included
Additional Coverage	Theft, vandalism, broken glass, natural disasters	Optional

Specific Conditions and Procedures:

• Claims must be filed within 2 to 10 days after the incident (depending on the nature of the claim).
• Provision of supporting documents (invoices, photos, police report in case of theft).
• Insurer may deny compensation in case of late reporting or false declaration.

Legal or Financial Consequences for Non-Compliance:

• For tenants, lack of “rental risks” insurance constitutes legitimate grounds for lease termination by the property owner.
• In case of damage, uninsured tenants must compensate the property owner from their own funds for all damages caused.
• Some banks may declare loan default in absence of required home insurance subscription during mortgage financing.

Concrete Examples and Typical Cases:

• A tenant accidentally causes a fire in the apartment: if uninsured, they must pay for all repairs to the property owner.
• A property owner purchases a property with credit: the bank requires home insurance certificate before releasing funds.
• Employer-provided housing: the tenant has no legal obligation to subscribe to home insurance, unless explicitly stated in the housing agreement.

Comparison with Other European Countries:

Country	Mandatory Home Insurance for Owners	For Tenants	Remarks
Hungary	No (except loans)	Yes (rental risks)	Loans: contractual requirement
France	No	Yes	Similar practice to Hungary
Germany	No	No	Insurance often subscribed
Spain	No (except loans)	No	Loans: contractual requirement
Italy	No	No	Insurance strongly advised

Key takeaway: in Hungary, home insurance is mainly mandatory for tenants to cover rental risks. For property owners, it’s only imposed by banks when granting mortgage loans. Failure to comply with these obligations exposes individuals to heavy financial consequences and disputes with landlords or banks.

Hungarian Home Insurance Comparison

Insurance Company	Specific Offers	Coverage Levels	Cost (monthly premiums, deductibles, supplements)	General Terms and Common Exclusions	Customer Reviews and Satisfaction
Allianz Hungária	Several customizable packages: personal property, theft, water damage.	Basic to premium	Premiums around 3,000-7,000 HUF/month. Variable deductibles depending on package. Supplements for valuable items.	Frequent exclusion of damages due to negligence or lack of maintenance. Natural disasters sometimes limited.	Good reputation for quick claims handling. High satisfaction with contract clarity.
Groupama	Discounts up to 30% through real estate partnerships; emergency assistance options.	Flexible coverage adapted for tenants and owners	Competitive premiums starting from approximately 2,500 HUF/month with partner discounts. Low deductible possible as paid option.	Standard exclusions: normal wear and tear, intentional acts; attention to required furniture inventory in case of theft.	Customers satisfied with price-quality ratio and customer service accessibility.
K&H Biztosító	Family package with included legal protection; extended liability coverage.	Standard + extensions	Market average: starting from ~4,000 HUF/month. Moderate deductibles (5-10%) of declared damage. Installment payment available.	Non-coverage of damages related to undeclared pets; exclusion of pre-existing defects before contract	Digital service appreciated but processing times sometimes criticized during major weather events
KöBE	Specialized in non-life insurance; products adapted to local needs	Industry standard	Premiums aligned with market: approx. 3,500–6,000 HUF/month depending on chosen option. Customizable deductible.	Typical exclusions: gross negligence, exceptional disasters like war or terrorism not covered.	Good contract transparency, strong local network but more limited choice than multinationals.

Hungarian Market Specifics

• Strict price regulation since early 2025: government imposes voluntary price caps to prevent sudden increases and protect households from inflation.
• Insured amounts are regularly reviewed to follow actual real estate values, thus limiting underinsurance risk without excessively increasing premiums.
• Most contracts require precise declaration of insured contents (furniture, electronic devices…); any omission may lead to reduced or denied compensation.
• Digital services are rapidly developing among all major Hungarian insurers: quick online simulation, mobile claims management.

Summary Checklist – Important Points Before Subscription

• Systematically verify if the policy covers all types of natural risks, as some exclusions remain (local floods…).
• Carefully compare deductible levels, which can vary significantly between companies even at equal premiums.
• Check if supplements are required for valuable items (jewelry, artwork) or specific equipment (swimming pools, outbuildings).
• Consider actual customer service level during mass claims events (regional flooding…), major differentiating factor according to customer reviews.

The competitive context currently ensures strong price stability, but it’s essential for each potential buyer to analyze their actual needs against the customizable offers proposed by each major player in the Hungarian sector.

Liability Insurance and Rental Risk Coverage

Legal obligations in Hungary require tenants to subscribe to at minimum insurance covering rental risks (fire, water damage, explosion), to compensate the property owner in case of incidents for which they’re responsible. This obligation doesn’t apply to seasonal rentals or employer-provided housing. The property owner, meanwhile, isn’t legally required to subscribe to home insurance, but is strongly recommended to do so to protect their property against risks not covered by the tenant’s insurance.

Risks Covered by Rental Insurance:

• Damages to rented property: fire, water damage, explosion.
• Damages to property owner’s belongings caused by the tenant.
• Damages to third-party property (for example, neighbors affected by an incident).
• Depending on contracts, may also cover: theft, vandalism, personal liability insurance.

Risk Type	Covered by Rental Insurance	Details
Fire, explosion	Yes	Mandatory for tenant
Water damage	Yes	Mandatory for tenant
Damages to neighbors	Yes	If incident impacts surrounding properties
Theft, vandalism	Optional	May require extension or broader contract (home multi-risk)
Personal liability insurance	Optional	Not systematically included in basic rental insurance

Differences Between Mandatory and Optional Insurance:

• Mandatory: “rental risks” insurance for tenants covering damages caused to the rented property (fire, explosion, water damage).
• Optional: extensions for theft, vandalism, personal liability insurance, damages to tenant’s personal property, etc.

Implications for Uninsured Tenants in Case of Damage:

• The tenant must personally compensate the property owner for all damages caused to the rented property.
• In case of damages to third parties (e.g., neighbors), the tenant may be sued and must compensate the victims.
• The property owner may terminate the lease for non-compliance with insurance obligation.

Expert Recommendations for Optimal Coverage:

• Subscribe to home multi-risk insurance (HMR), which includes mandatory rental risk coverage and additional guarantees (theft, vandalism, extended liability).
• Verify compensation limits and deductibles applied by contract.
• Adapt coverage to personal property value and property nature.

Comparison with Other European Countries:

Country	Mandatory Rental Insurance for Tenant	Mandatory Owner Insurance	Regulatory Specifics
Hungary	Yes (rental risks)	No	Strong recommendation for owner
France	Yes (rental risks)	No	HMR very widespread
Germany	No	No	But strongly recommended
Spain	No	No	Practice varies by region
Italy	No	No	Generally optional

Important Remarks:

• In Hungary, as in most Central European countries, mandatory rental insurance mainly aims to protect the property owner against incidents caused by the tenant.
• International or expatriate contracts often include specific limits (e.g., €100,000 per claim for rental liability, up to several million for extended liability).
• Lack of insurance exposes tenants to heavy financial consequences and contractual disputes.

Key Takeaway:

“Rental risks” insurance is a legal obligation for all tenants in Hungary; property owners remain free but strongly encouraged to insure themselves. For optimal protection, it’s advisable to subscribe to home multi-risk insurance, covering both rental risks and liability towards third parties.