A surge in construction costs has sharply increased residential property values in Croatia, while much of the housing stock remains underinsured. Institute IGH data show average building costs rose by around 50% between 2019 and 2024, lifting benchmark values used to set insured sums.

As insured values are adjusted to reflect higher rebuilding costs, property insurance premiums have followed suit. Croatia osiguranje reports that average property insurance premiums increased by about 10% in 2025, a rise it attributes solely to indexation linked to the higher benchmark construction price—not to inflation or climate risk. A similar explanation comes from Generali, which says premium increases of around 20% in recent years reflect corrections to insured sums, aligning coverage with the real value of homes.

The adjustment process, however, highlights a deeper structural issue. Despite the fact that over 90% of Croatians own their homes, only 20–25% of residential properties are insured, according to estimates cited by insurers and industry analyses by the Croatian Insurance Bureau (HUO).

In practice, this means many homeowners risk discovering—only after a loss—that their policies cover far less than the true cost of rebuilding. In a country where property is the main store of household wealth, underinsurance remains one of the Croatian insurance market’s most pressing vulnerabilities.