Spain: Insurance

Overview

An important aspect of owning a home in Spain is insurance, not only for your home and its contents, but also health insurance for you and your family when visiting Spain. If you live in Spain permanently, you require additional insurance. It’s unnecessary to spend half your income insuring yourself against every eventuality, from the common cold to being sued for your last euro, although it’s important to insure against any event that could precipitate a major financial disaster, such as a serious accident or your house being demolished by a storm. The cost of being uninsured or under-insured can be astronomical.

It’s vital to ensure that you have sufficient insurance when visiting your home abroad, which includes travel insurance, building and contents insurance and health insurance, as well as continental car insurance (including breakdown insurance) and third party liability insurance.

As with anything connected with finance, it’s important to shop around when buying insurance. Collecting a few brochures from insurance agents or making a few calls can save you a lot of money. Not all insurance companies are equally reliable or have the same financial stability and it may be better to insure with a large international company with a good reputation than with a small (e.g. Spanish) company, even if this means paying higher premiums. On the other hand, you may prefer to insure with a company with a local office where you know the staff personally rather than a national or international company whose only contact is by phone (and never to the same person!).

Read insurance contracts carefully and make sure that you understand the terms and the cover before signing them. Some insurance companies will do almost anything to avoid paying claims and use any available legal loophole, therefore it pays to deal with reputable companies only (not that this provides a foolproof guarantee). Spanish insurance companies can compel you to renew your insurance for a further year if you don’t give adequate written notice (e.g. up to three months) of your intention to terminate it, although most companies allow policyholders to cancel on renewal. Check in advance.

In matters regarding insurance, you’re responsible for ensuring that you and your family are legally insured in Spain. Regrettably you cannot insure yourself against being uninsured or sue your insurance agent for giving you bad advice! Bear in mind that if you wish to make a claim on a policy, you may be required to report an incident to the police within 24 hours (this may also be a legal requirement). The law in Spain may differ considerably from that in your home country or your previous country of residence and you should never assume that it’s the same. If you’re uncertain of your rights, you’re advised to obtain legal advice for anything other than a minor claim. Under European Union (EU) rules, an insurance company registered in an EU member country can sell its policies in any other EU country.

© Survival Books Limited 2005

“Buying a Home in Spain 2006” 5th Edition, David Hampshire.

Reproduced with the permission of Survival Books Limited.

Further information on this topic can be found in “Buying a Home in Spain 2006” 5th edition, by David Hampshire.

For extensive, annually updated information about buying a property in Spain, you can purchase this book at www.survivalbooks.net