Home insurance in Spain tends to be somewhat cheaper than home insurance in countries like the UK. This can be easily demonstrated by anyone prepared to take the time to collect comparative quotes. So the good news is that holiday home insurance in Spain won’t cost you a fortune, but having said that insurance premiums are on the rise – by over 4% in 2007.
However, as anyone who has ever needed to claim on their home insurance knows, the cost of premiums is just one factor to bear in mind. You also want a policy that covers your needs, and that doesn’t shaft you in the small print. Taking out the cheapest house insurance in Spain and saving 50 Euros a year could prove expensive should you ever need to make a claim. Generally speaking, the cheapest policies also give insurance companies the greatest wiggle-room. Therefore, when taking out Spanish home insurance, I advise you to look for a balance between price and cover.
Home insurance in Spain
When taking out home insurance in Spain, you can opt for buildings cover, contents cover, or both. The more you cover, the more it will cost.
Buildings cover insures the structure of your property, and all fixtures. If you buy with a mortgage, your lender will insist on buildings cover.
The building cover will be based on an insurable value for your property, which is not the same as the market value for your property (or what you paid for it). The building and fixtures are insured, not that land your property is built on, which explains the difference. Your insurance policy will be based on what it costs to rebuild your property, not what it would cost to buy it anew. To calculate this ‘rebuild’ value, insurers use standard tables of building costs per square metre. The higher the building specifications of your property, the higher the insurable value, and hence premiums.
Contents cover insures all personal belongings that are not part of the structure or fixtures, so basically anything that isn’t nailed down or screwed in, like furniture, computers, artwork, and jewellery. The cost of cover will depend upon well secured your property is. The stronger your security features such as doors, shutters, and alarms, the lower your premiums.
Most policies will also include a level of third party liability cover, though you need to check this before signing up to any policy. Third party liability in Spain is usually low relative to other counties such as the UK. This is because awards for damages also tend to be much lower.
If you plan to rent out your holiday home to tourists, be sure you get appropriate insurance cover.
Holiday home insurance Spain
You have 3 alternatives for arranging holiday home insurance in Spain
1. Arrange an insurance policy through a bank in Spain. All Spanish banks can offer home and other types of insurance. Generally speaking this is the cheapest option. However, do not expect much in the way of support, and be sure to pay great attention to the small print. A cheap home insurance policy from a bank is likely to be a big headache should you ever need to make a claim.
2. Find an insurance broker based in Spain, of which there are many to choose from. You will not have trouble finding a broker who can deal with you in English, though service and professionalism can be patchy. The problem is you may find the friendly service disappears once you have purchased the policy, and if you have to make a claim, you may find yourself on your own dealing with an insurer who doesn’t speak your language.
3. Take out insurance in your home country. There are a few companies offering overseas property insurance. The premiums might be a bit more expensive, but on the plus side all the documentation and service is in a langue you understand. One option is the holiday home and second home insurance specialists Intasure, who are regulated by the Financial Services Authority in the UK. Please note that Intasure pay SPI a commission for client introductions.
Everything you need to know about home insurance Spain