Home & Household Insurance in Spain

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Home & Household Insurance in Spain

Household insurance (seguro de hogar) in Spain generally includes the building, its contents and third party liability, all of which are contained in a multi-risk household insurance policy. Policies are offered by both Spanish and foreign insurance companies and premiums are similar, although foreign companies may provide more comprehensive cover.

Building Insurance

Although building (continente) isn't compulsory, it's advisable for home owners to take out property insurance that covers damage to a building due to fire, smoke, lightening, water, explosion, storm, freezing, snow, theft, vandalism, malicious damage, acts of terrorism, impact, broken windows and natural catastrophes (such as falling trees). Insurance should include glass, external buildings, aerials and satellite dishes, gardens and garden ornaments. Note that if a claim is the result of a defect in its design, e.g., the roof is too heavy and collapses, the insurance company wont pay. 

Property insurance is based on the cost of rebuilding your home and should be increased each year in line with inflation. Make sure that you insure your property for the true cost of rebuilding. 

It's particularly important to have insurance for storm damage in Spain, which can be severe in some areas. If floods are one of your concerns, make sure that you're covered for water coming in from ground level, not just water seeping in through the roof. Always read the small print of contracts. 

• Note: if you own a home in an area that has been hit by a succession of natural disasters (such as floods), your household insurance may be cancelled.

Contents Insurance

Contents (contenido) are usually insured for the same risks as building and are insured for their replacement value (new for old), with a reduction for wear and tear for clothes and linen. Valuable objects are covered for this actual declared (and authenticated) value. Most policies include automatic indexation of the insured sum in line with inflation. 

Contents insurance may include accidental damage to sanitary installations, theft, money, replacement of locks following damage or loss of keys, frozen food, alternative accommodation cover, and property belonging to third parties stored in your home. Some items are usually optional, e.g. Credit cards, frozen foods, emergency assistance (plumber glazier etc), redecoration, garaged cars, replacement pipes, loss of rent, and the cost of travel to Spain for holiday home owners. Many policies include personal third party liability.

Items of high value must usually be itemised and photographs and documentation (e.g. a valuation) provided. Some companies even recommend or insist on a video film of belongings. When claiming for contents you should produce the original bills where possible (always keep bills for expensive items).

If you're planning to let a property, you may be required to inform your insurer. 

On mainland Spain, a building must be secure with iron bars (rajas) on ground floor windows and patio doors, shutters and secure locks (not the case in the Balearics). Most companies give a discount if properties have steel reinforced doors, high security locks and alarms (particularly alarms linked to a monitoring station). An insurance company may send someone to inspect your property and advise on security measures. 

Policies only pay out for theft where there are signs of a forced entry you aren't covered for thefts by a tenant (but may be covered for thefts by domestic personnel). All-risk policies offering a world wide extension to a household policy covering jewellery, cameras and other items aren't usually available from Spanish insurance companies, but are offered by foreign companies.

Holiday Homes

Premiums are generally higher for holiday homes due to their high vulnerability, particularly to burglaries. Premiums are usually based on the number of days a year a property is inhabited and the interval between periods of occupancy. Cover for theft, storm, flood and malicious damage may be suspended when a property is empty for an extended period. 

• Note: you're required to turn off the water supply at the mains when vacating a building for more than 72 hours. 

It's possible to negotiate cover for periods of absence for a hefty surcharge, although valuable items are usually excluded (unless you have a safe). If you're absent from your property for long periods (for example, over 90 days a year) you may be required to pay an excess on a claim arising from an occurrence that takes place during your absence (and theft may be excluded). It is important to ensure that a policy specifies a holiday home and not a principle home.

In areas with a high risk of theft (e.g. major cities and most resort areas), an insurance company may insist on extra security measures. It is unwise to leave valuable or irreplaceable items in a holiday home or a property that will be vacant for long periods. You should ensure that the details listed on a policy are correct; otherwise your policy could be void.

Insuring Abroad

It is possible (and legal) to take out building and contents insurance in another country for a property in Spain and some foreign insurance companies offer special policies for holiday homeowners, although you must ensure that a policy is valid under Spanish law. 

The advantage is that you will have a policy you can understand and you will be able to handle claims in your own language. This may seem like a good option for a holiday home in Spain, although it can be more expensive than insuring with a Spanish company and can lead to conflicts if, for example, the building is insured with a Spanish registered company and the contents with a foreign based company. Most experts advise that you insure a Spanish home and its contents (continente y contenido) with a Spanish registered insurance company through a local agent.

Premiums

Premiums are usually calculated on the size (constructed area in square meters) of a property, its age the value of the contents and the security protection, such as window protection at ground level, the number of entrance doors and their construction.

In general, detached, older and more remote properties cost more to insure than apartments and new properties (particularly when they're located in towns), due to the higher risk of theft. Premiums are also higher in certain high-risk areas.

Claims

If you wish to make a claim, you must usually inform your insurance company in writing (by registered letter) within two to seven days of an incident or 24 hours in the case of theft. 

Thefts should also be reported to the local police within 24 hours, as the police report (denuncia), of which you receive a copy for your insurance company, constitutes irrefutable evidence of your claim. Check whether you're covered for damage or thefts that occur while you're away from your property and are therefore unable to inform the insurance company immediately. 

You can arrange to have your insurance cover automatically increased annually, by a fixed percentage or amount, by your insurance company. If you make a claim and the assessor discovers you a re under -insured, the amount will be reduced by the percentage by which you are under insured.

Extract from Living and Working in Spain 2005 (5th Edition) 
by David Hampshire
Published by Survival Books Ltd, Survival Books, P.O. Box 3780,Yeovil, Somerset, BA21 5WX, United Kingdom. Tel/Fax: (+44) 01935-700060
Copyright © 2005 Survival Books Ltd All Rights Reserved