Home and Household Insurance
Buildings and contents insurance for a house or second, holiday home in Spain: the legal obligations of a homeowner, and what options of cover they may expect for their property...
Building and contents (continente y contenido) insurance is essential to the home owner in Spain. Contents insurance (contenido) is also recommended when renting a property in Spain. Insurers offer a range of covers to suit the specific requirements of this market.
Policy options include:
- Standard comprehensive policies with public liability insurance (also known as liability to third parties)
- Accidental damage cover and "All Risks" outside the home
- Liability cover for dangerous dogs, cover for non-dangerous dogs is automatically included
- Property Owners Liability (landlords) for rented accommodation
- Increased limits for liability cover
Household insurance (seguro del hogar) in Spain generally includes the building, its contents and third party liability. Insurers do not have to be based in Spain and many insurers outside the country offer insurance policies on properties in Spain. Many of them, even Spanish-based ones, are able to provide insurance policies written in English.
Building's Insurance (continente)
The building sum insured should represent the rebuilding value for the property and not the market value. Rebuilding costs have risen dramatically in Spain over recent years; it is important that the rebuilding sum insured is realistic or any claim may be reduced for underinsurance. As a rough guide the rebuilding sum insured should be about €1,500 per square metre of a constructed property.
Inflation is accommodated by index linking which covers standard inflationary increases. This is reviewed automatically annually by insurers. Market forces can cause variations locally and the insured should request advice if unsure that the sum insured is adequate. Generally, standard policies do not have any excess although a reduction in the premium can be obtained if an excess is taken.
If the owner has a mortgage on the property, the bank will insist on building insurance with a clause on the policy noting their interest.
Contents Insurance (contenido)
Home insurance policies in Spain are generally on a "new for old" basis (this means that in the event of a claim insurers will settle the claim based on the value of a similar but new item to the one lost or damaged). It is therefore important that the contents sum insured reflects the replacement value.
In the UK bathroom and kitchen fitments are usually covered under the buildings section of a policy. In Spain this is not always the case and the value often has to be included under the contents sum insured.
The owner of a property that is rented out as holiday accommodation must make sure that the insurers are aware, and check that they have have adequate public liability cover as a landlord. Liability limits of Spanish insurers tend to be fairly low, although some Spanish insurers do offer higher limits and this should be checked with the adviser or insurer.
If the property is a holiday home insurers must be advised of the periods of non-occupancy.
Note: People who live in communities must be aware that their community policy may not provide cover in the event of damage to the buildings. Advice on this point should be sought from an insurance adviser.
Making a Claim
Claims must be reported to the insurers or insurance adviser as soon as possible. Policies usually have a time limit for claims of seven days (check on the policy). Contact the advisor or insurer by telephone, fax, letter or email. Although it is written in the policy that claims must be reported within seven days, if there are circumstances which prevent the client from doing this, then insurers will normally take this into account when dealing with the claim.
In the case of a robbery, malicious damage or arson a police report (denuncia) must be obtained and sent to the insurer with the claim.