Are Spanish policies the same as the UK?
Home Insurance is relatively new in Spain. 25 years ago less than 40% of Spanish people insured their properties. To an extent this explains why domestic policies are not the same as the ones we are used to back in the UK. The main differences are the following:
New for old – This only applies to contents which are less than two years old. Anything item older than this will be replaced at second hand value. A lot of companies do not even offer this option.
Petty theft (Hurto) – This is not covered by domestic policies. Some companies will cover you if you are physically attacked however they would expect you to fight back at the attacker. In a recent case an elderly couple had a claim rejected because they had not put up any resistance to the mugger who stole their bag and jewellery.
The ‘all risk cover’ which we are used to in the UK is not provided by domestic companies
Accidental damage – This generally is not covered by domestic companies
Public liability – The concept of ‘ambulance chasing’ has not yet reached Spain which is a good thing but it also means that the domestic companies do not give it much important
Occupancy – You should make it clear when taking your policy whether you intend for it to be a permanent residence or a holiday home. This clause is often used to avoid paying claims.
Do I HAVE to have my insurance with the bank if I have my mortgage?
The simple answer is no. The more complicated answer is convincing the local bank manager. Under Spanish and European law the only thing you must do is insure your buildings to the same value as your mortgage. The banks insurance will generally have a lot of holes as they are only concerned with protecting the mortgage. In other words they will protect against fire and little more. You will also tend to be over insured on the buildings as the bank will insist that you cover the mortgage sum which is normally more than the rebuild sum of your property. The advantage of starting with an independent company is that in the second year you can reduce the buildings sum and therefore your overall premium. There have been some cases where the bank has not insured the contents, something which was only discovered when the clients tried to make a claim.
All general insurance premiums in Spain include a tax known as the ‘Consorcio Tax’. The consorcio is a government agency which deals with claims related to subsidence, earthquake etc. Domestic companies do not cover for these and will refer any claims to the Consorcio. The two main problems with this are that you generally do not receive the amount you have claimed and secondly you are dependent on the Spanish bureaucratic system.
As general manager of Intasure in Spain I am pleased to confirm that our all risk Norwich Union Policy would cover all the areas that I have mentioned above and if you would like more information on our policy you can contact us on 900 110 680 or click on the link on this website and if you mention the ‘This is Spain’ website you will be entitled to a 10% discount on your premium.
Manager – Intasure Spain