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Dolan Property
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Buying or renting a home in Spain - what property insurance do I need?
19th August 2023
By Michael Dolan
If you are purchasing a property in Spain, whether it is your dream-villa to live in, an apartment for holidays in the sun, or a buy-to-let investment, one of the most important factors to consider is insurance. How does it work? What type do you need? And where to get it?
The Directorate-General for Insurance and Pension Funds (DGSFP) - (Direccion General de Seguros y Fondos de Pensiones) - regulates the Spanish insurance industry, and all companies face criminal prosecution and large fines, if they do not operate in accordance with the law.
Home insurance cover is not mandatory in Spain; nonetheless, many take out a policy to protect their property and give themselves peace of mind. When deciding on a policy, you can choose between buildings cover and contents insurance, or one that combines the two. A combination one is generally the most popular type of insurance for homeowners and is usually just called home or household insurance (seguro de hogar).
Spanish Buildings Insurance.
Building insurance (seguro de construcción) covers the fixed property including walls, floors, ceilings, and any internal fixtures, and if you buy your property with a mortgage, your provider will normally insist on you taking out some type of cover.
The cost will vary depending on the value of the property. The insurable value is not the same as the current market value, or the amount you paid for it, it is the amount it will cost to rebuild (not to buy new). This also means the materials used to build will be considered when calculating the cost, and factored in.
In addition, they will factor in the type (villa, apartment, townhouse), size, age, and condition of the property, plus where it is located. Other considerations will include security and whether it is your primary residence, or a second/holiday home, and whether you are looking to rent it out (both long and short-term rentals).
In fact, most insurers will sell specific insurance for apartments, listed and protected buildings, properties that are empty for long periods of time (for instance whilst you are out of the country), and for holiday rentals.
There are also different levels of insurance to consider. These range from essential cover through to all-risk. Some may only cover basics like the walls, floors and ceilings, bathroom, and kitchen fixtures; whilst others will include heating and air-conditioning. Certain policies will cover the whole cost of a rebuild, and others will only pay for repairs. As with any insurance you get what you pay for – and you need to make sure you read the fine print.
Contents Insurance – Spain.
Contents insurance (seguro de contenido) covers all personal belongings that are not part of the structure or fixtures. It is sometimes referred to as renters or tenants’ insurance (seguro de inquilinos) because it is frequently sold singularly to those renting a property. This could include furniture, art, electronics (computers, gaming systems, TVs), and jewellery.
As with buildings insurance generally the higher the premiums you pay, the more it will cover – so make sure you examine the conditions and exemptions carefully. Also check with your provider when you take out the policy, as some high price items need to be specified ahead of time, with photos, valuations or receipts, things like certain pieces of art, jewellery, or bikes.
Again, premium costs will also depend on the property’s location, access (first floor apartment vs ground floor), and the type of security you have – alarms, locks, shutters. Most standard plans protect against fire, water and electrical damage, theft, vandalism, and civil liability coverage.
Civil Liability Cover – Spain.
Most home insurance in Spain includes civil liability cover, (seguro de terceros o de responsabilidad civil), also known as third party cover. This means you are insured against any liability for damages caused to third parties.
It will cover you against any costs arising from an incident that happened in your home or was caused by your property (i.e., a garden wall fell); which caused an injury to another person or damage to their property. This would generally include any related legal, medical, and property replacement costs.
Where to find insurance? Making a claim and cancelling a policy.
Most major banks in Spain offer home insurance; and that is potentially the cheapest option. You can also go direct to one of the big insurance companies; or you can go via a broker. If your Spanish isn’t excellent, finding a good English-speaking broker is probably the best option as they will help with any paperwork and forms, and can support you if you need to make a claim.
Should you need to make a claim on your home insurance you need to contact your insurer as soon as possible. Many companies have a time limit on filing the claim, often as little as within 7 days of the incident. Details of exactly how to do this will be provided by the insurer, or your broker when you take out the policy. Clear-cut and uncomplicated claims are normally settled fairly quickly and Spanish law states that you must be reimbursed within 3 months.
Many insurance policies in Spain (car, home, health) automatically renew, unless you give advance notice of termination. You generally need to write to the company informing them of your plan to cancel the contract, at least one clear month before the end of your current contract term, otherwise you may be liable for another whole year’s cover.
Property Sales in Marbella
If you are looking for a holiday retreat, a permanent residence, or you want an investment property -
Marbella’s mix of the luxurious gated developments, picturesque mountains and beaches, and the private tranquil urbanisations make it the place to buy on the Costa del Sol.
We understand that choosing a new home is a big step, and for those of you buying or selling a property in a foreign country, it can be very stressful. Our team of real estate experts provide a full ‘hands on’ service. We work in partnership with you (our client), your lawyer and any other professional advisers or consultants.
Dolan Property is here to help you through the whole process, every step of the way. We are based in the heart of Marbella’s Golden Mile and specialise in high quality, desirable properties in prime residential locations; Nagüeles, Sierra Blanca, Cascada de Camoján, East and West Marbella, Istan Road, Nueva Andalucia, and the new Golden Mile in Estepona.
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