Home Insurance - FAQ

The advantage of home insurance is that it offers a solution to different types of claims. Some may be extreme and unlikely to happen, and others not as serious.

The greatest dangers are those that can damage your personal economy and jeopardize the security of your household. This includes fires, gas blasts and issues that could bring civil liability at the same time.

Troubles such as theft could happen quite frequently, as could windows being shattered or water damage, but these typically have a small impact on a family savings.

There are two types of home insurance policies:

• Multi-risk, where the insurance companies will cover a list of potential situations or unplanned incidents. Anything that is not on this list will be excluded.
• Fully comprehensive insurance, where multi-risk problems would still be covered, but also other circumstances (that have not been expressly excluded in the insurer’s contract) The price is clearly higher for this type of contract. The typical family of four people living in a flat of 90 square metres, could have a fee between 200 and 300€ a year to achieve significant coverage with that type of insurance.

Is there any insurance that covers all the risks existing in a home? Yes. This segment of the insurance market is primarily for big properties, reaching at least 3,000€ a year to have more protection than usual.

It is vital that the list of events protected by the insurance are sufficient and suitable for the individual needs of the property, the client lifestyle, etc. The figure of the insurance broker is crucial between the insurer and the client. They are normally professionals who know well the insurance world and its products. They know how insurance companies work and which ones are appropriate for each specific client.

Buildings insurance cover destruction to the actual structure and features of your home. It will also cover bathrooms, bath tubs and fitted kitchens, your interior ornaments and bedroom fitted closets, swimming pools, gates, fences, tennis courts, drives, garages and other outbuildings.

Almost everything that you own in your house. This includes furniture, kitchen equipment,  electrical appliances including televisions, food and drink , computers and laptops, entertainment equipment, clothes, decorations and other valuables. As with all policies there are some exceptions and exclusions so we recommend that you take time to read the policy booklet to discover those that apply.

For buildings insurance, you should insure your home for its complete rebuilding cost (for example, how much it would cost to rebuild if it was destroyed). This is different to the market value of your home. You can find your home’s rebuilding cost on the Valuation Report or Survey you had done when you purchased the property (although if it is more than a couple of years old it almost certainly needs to be increased to take account of inflation) in the absence of such report your agent should be able to assist you.

For contents insurance, you should insure the contents of your home for how much it would cost you to replace them new.

There are many things to consider. To insure a first-floor property is more costly than a flat on a mid-level floor. The risk of theft or robbery is greater in these types of houses.

The date of construction of the house is crucial. Also it is important the last time it was refurbished, especially at the level of the water structure, electrical installations and heating.

The surface area is important too. The constructed surface area of the property must be declared in the insurance contract in metres squared, including all common areas and parking space.

The location of the property is important. The accessibility of the area, plus how close it is to fire stations or police stations, may be considered when getting a home insurance.

In this way, the expectations of the insurance will correspond to what has really been taken out and there will be few surprises. Some insurers limit coverage for fire or water damage to a certain maximum limit. Make sure you know these terms before signing the insurance contract.

For contents insurance, you should insure the contents of your home for how much it would cost you to replace them new.

In spite of what the banks frequently say to us, it is not actually required to have home insurance, unless one of the requirements of getting a mortgage with that particular financial entity entails it with certificates or derivatives.

Now, with the Mortgage Directive that came into force in Spain in March 2016, the combining of insurance to banks is prohibited, which gives more freedom of choice to the customer when choosing their insurance provider. Although this Directive has not yet gone through, it may still apply.

According to article 1.902 of the Spanish Civil Code, the resident or homeowner is liable for the damage caused to third parties. Another article, article 1.907, regulates the damage that the occupant might cause by ruining the house or its facilities, and that they must face payment of these damages themselves using current and future assets (this is established in article 1.911 of the Code).

Liability insurance helps to make a legal defence to a justified or unjustified claim that you might receive. All legal costs, notaries and lawyers will be paid for by the insurance. In the case of a conviction, and if the insurance contract is properly drawn up, that could also be paid for.

Below is an average summary of cover, although each insurer’s policy should be checked individually:

Buildings

• Covers fire, smoke, lightning, storm or flood (excluding fences and gates), theft, explosion, escape of water or oil, vandalism and collision.
• Subsidence for properties less than 10 years old.
• Legal liability as owner of your home.
• Loss of rent and cost of alternative accommodation.
• Accidental damage of fixed glass and sanitary fittings.
• Garden restoration.
• Falling trees or aerials.
• Emergency Access.
• Property Owners Liability.

Contents

• Legal liability as occupier of your home.
• Accidental damage to glass tops, home entertainment equipment and personal computers (exclusions apply).
• Contents temporarily removed.
• Contents in the open.
• Frozen food spoilage.
• Theft of keys – Limit €750
• Title Deeds – Limit €750
• Increase in cover over Christmas period and for Weddings.
• Extended Accidental damage cover (optional).

Optional extras

• Valuables & personal effects, both specified and unspecified.
• Personal money and credit cards.
• Pedal cycles cover for accidental loss or damage.
• Golf cover for equipment, apparel, and buggies.
• Emergency travel cover.
• First Loss -Cover for loss or damage to your fixtures and fittings up to the total sum insured, without reference to their value and without application of average should their value be greater than the sum insured.