Comparison of Mandatory Property Insurance in Montenegro

Published on September 30, 2025 and written by Cyril Jarnias

Investing in Montenegro Real Estate: Mandatory Insurance

Montenegro, a small Balkan country with picturesque charm and pristine nature, is attracting an increasing number of real estate investors eager to benefit from its booming market. However, investing in Montenegrin real estate requires thorough knowledge of mandatory insurance, which is often varied and unfamiliar to foreigners.

Through this comparison, dive into the complex world of the country’s legal requirements to navigate this dynamic sector with complete peace of mind. Discover how these insurance policies can not only protect your property but also shape the ideal investment strategy in one of the region’s most promising economies.

Mandatory Insurance for Property Owners in Montenegro

Types of Mandatory Insurance for Real Estate Owners in Montenegro

In Montenegro, there is no general requirement forcing real estate owners to purchase home insurance covering property against fire, theft, or other material risks. Subscribing to such insurance remains largely optional and depends on the owner’s personal choice. However, certain specific insurance policies may be required in particular situations:

• Liability insurance: mandatory only in specific cases (for example, for condominiums or during construction work involving risk to others).
• Construction insurance: required for major construction projects to cover liability during the construction phase.

It should be noted that there is a separate requirement for car insurance (liability), but this only concerns the ownership and use of motor vehicles, not residential real estate.

Overview of Legal Requirements Imposed on Owners

Current legal requirements regarding mandatory insurance are as follows:

• No widespread obligation for multi-risk home insurance.
• Occasional obligation for liability insurance in the context of:
  • Condominiums (to cover damages caused to third parties by common areas).
  • Major construction projects requiring permits.
• Compliance with any contractual clause imposed by a lending institution in case of real estate financing: some mortgage loans may require minimum coverage against certain risks.

Exceptions and Circumstances Where Insurance is Optional

In all other cases not explicitly provided for by law (standard single-family home without a bank loan or professional activity), no insurance is legally required. The owner therefore has full freedom regarding whether or not to subscribe to a policy covering their property.

Summary in Table Form:

Situation	Mandatory Insurance	Optional
Single-Family Home	No	Yes
Condominium	Yes	No
Construction Site with Permit	Yes	No
Mortgage with Contractual Requirement	Depends on Contract	Possible

Potential Penalties for Non-Compliance

In case of absence of coverage specifically required by law or a contract:

• For lack of construction site insurance: administrative penalties may include fines, temporary suspension of work, or even revocation of the permit.
• For failure related to condominiums: potential legal action in civil courts for full compensation of damages caused.
• General lack of home insurance: no direct administrative penalty unless it violates a specific contractual stipulation.

Notable Differences with Neighboring Countries

Synthetic Comparison:

Country	Mandatory Home Insurance?	Specific Features
Montenegro	No	Occasional obligations based on usage/construction
Croatia	No	Mandatory only for public/collective buildings
Serbia	No	Similar principles to Montenegro
Bosnia-Herzegovina	No	Almost total freedom outside the public sector

Throughout this Balkan region, unlike some Western countries like France or Italy where certain forms are mandatory as soon as a loan is involved or through rental/condominium status, the principle of freedom generally prevails regarding standard home insurance. Obligations are targeted at a few specific situations falling more under civil law than public law.

Key Takeaway: In Montenegro, only insurance related to collective contexts (condominiums) and specific operations imposes a direct regulatory constraint on the real estate owner.

Understanding Owner Liability in Montenegro

Definition of Owner Liability in Montenegro

Owner liability refers to the legal obligation for any person owning real estate to compensate for damages caused to others by the property itself or by their negligence in maintaining or managing the property. According to the Civil Code, everyone is responsible not only for directly caused damages but also for consequences resulting from negligence or imprudence. This obligation also applies to owners who must answer for injuries related to their property.

Legal Obligations of Owners in Montenegro

• Maintain and secure their property to avoid any danger to third parties
• Take all reasonable measures to prevent accidents occurring on their property (slips, falls, falling objects)
• Comply with local regulations regarding safety and insurance

Types of Damages Covered

Type of Damage	Concrete Example
Bodily Injury	A visitor gets injured slipping on poorly maintained stairs
Property Damage	A flowerpot falls from a balcony and damages a car
Damages Caused by Lack of Maintenance	Fall due to an unshoveled walkway

Concrete Examples Where Liability May Be Incurred

• A neighbor breaks their leg by tripping on a loose paving stone in front of your entrance.
• An untrimmed branch falls during a storm and causes damage at the neighbor’s property.
• Leaks from a poorly maintained roof affect the apartment below.

Comparison with Neighboring Countries

Country	Similar General Obligations	Mandatory Liability Insurance for Owners
Montenegro	Yes	Highly recommended, often required in condominiums
Croatia	Yes	Generally mandatory for collective housing
Serbia	Yes	Often optional except in special cases

Throughout the Balkan region, the legal basis remains comparable: a general duty of care towards others and a potential insurance obligation depending on status (owner-occupier, landlord…).

Precautions for Owners to Take

• Subscribe to appropriate liability insurance covering all types of risks related to the real estate property
• Perform regular maintenance (urgent repairs, technical inspections)
• Promptly report any potential danger to visitors or occupants
• Install anti-slip devices/handrails in exposed areas

Specific Liability Insurance in Montenegro

In Montenegro, as elsewhere in Europe, there are contracts specifically designed to cover these risks. These insurance policies typically cover:

• Legal fees following a claim/damage
• Direct compensation to victims if the incident is recognized as covered

For some collective buildings or properties rented/shared among several co-owners, this insurance becomes almost mandatory so that each party is protected against any lawsuit filed by an injured third party.

Liability insurance therefore constitutes a fundamental pillar among the guarantees required during major real estate transactions or when several people cohabit in the same building. It protects the owner’s assets both financially and legally against accidental events that may incur their liability.

Comparison of Rental Risk Coverage in Montenegro

Type of Rental Risk	Description	Frequency of Coverage in Montenegro
Property Damage	Deterioration of the property due to fire, water damage, storm, or vandalism	Common
Theft	Loss or deterioration related to burglary or attempted break-in	Fairly Common
Liability	Coverage for damages caused to others (neighbor, third party) by the tenant or owner	Mandatory

Comparison of Main Home Insurance Offers in Montenegro

Insurer	Basic Plan	Possible Extensions	Notable Specifics
Lovćen Osiguranje	Property Damage + Liability	Theft, Glass Breakage	Extensive National Network
Sava Osiguranje	Mandatory Liability	Legal Protection	Modular Options
Generali Osiguranje	Liability + Theft	New for Old Value	24/7 Claims Assistance

Costs and Comparison with Europe

• Annual premiums for home insurance covering essential risks generally range between €50 and €120 depending on the size and value of the property.
• Compared to Western European countries (France, Germany), rates are lower; in France, for example, equivalent coverage often costs between €150 and €250 per year.
• Deductibles applied remain low (often between €50 and €100).

Tip

Always insist that all important clauses be explicitly stated in the written contract provided at lease signing – ideally accompanied by an English translation if one of the parties is not Montenegrin.

Price differences remain significant compared to neighboring markets but are partly explained by a lower reported claims rate. This nevertheless encourages not to neglect certain extensions that could be essential depending on your profile or geographical location.