Home Insurance

If you own a property and have a mortgage, then your bank will have insisted that you take out an insurance policy to cover the building in case of damage, or even destruction.  Building insurance will repay the cost of repairing any damage that it might suffer or reconstructing your property, in the worst case.  If you have a mortgage, then the bank will be named as the beneficiary.

In many cases these policies will include contents insurance as well, and although this is not obligatory, in your excitement to sign all the rest of the papers involved in your house purchase, you probably just signed it along with everything else.  It is an easy and common mistake, whether you are from Belfast or Barcelona.  Needless to say, policies sold by your mortgage lender can be about 10% more expensive than an independent insurance company and tend to be less flexible.

Insurance premiums will tend to be cheaper in Spain, but it is a case of getting what you paid for. Regardless of the fluency of your Spanish, it is unlikely that you will have read the barely discernable small print of your policy to see what your insurance actually covers.  If you do, you will find that the norm in Spain differs from those you will have been used to in Ireland or the UK.  In the unfortunate event that you might want to make a claim, you will find that these policies may be less comprehensive than the terms of a similar policy in Ireland or the UK.  This can be a rude awakening. 

The key is to understand exactly what cover you are buying and the terms of the policy; this is something best understood in a language in which you are fluent.  Some insurance companies, such as Liberty, have conducted market research amongst expatriates and not only print brochures and terms in English, which is ideal, but also offer the option of terms of the type you will be more accustomed to.  These more comprehensive policies will tend to meet more closely your expectations of what is covered. 

Often the terms of Bank policies will require two month’s notice to cancel, so if you are thinking of looking for an alternative, start well before the term is up.  It is also a good idea to cancel the automatic transfer that will have been set up from your account because cancelling the policy may not automatically cancel the standing order.

Even if you do not have a mortgage, some level of building insurance is a good idea.  It is a mistake to think that these policies only cover your home in the event that it is destroyed.  For example, if you live on a community and the pipes in your home burst, damaging your neighbour’s property, the community building insurance is unlikely to cover it.  You will be liable for the damage.  To protect your liabilities in a community, it is possible to take out a reduced insurance which fills the gaps that the communal insurance does not, and this type of building insurance is cheaper.

Contents insurance can be built into a building insurance, or you can insure your contents in a separate policy.  For example, if you rent your home, you will obviously only need to insure the contents.  The total cover of this should be equivalent to the replacement value of your furniture and all your possessions.  A common problem in policies is under-valuing this amount.  Sometimes it is because the value of your contents was less when you took out the policy than it is now; over the years you will have acquired more possessions.  At other times it may be simply due to a lack of a bank manager’s attention in explaining the terms to you when you were signing the policy.  Bear in mind that the value you should insure for is not the second hand value of your possessions, but the replacement value if you had to buy it all over again.

The most common home insurance claims are from damage due to water, fire and smoke as well as burglary.  Some companies, such as Liberty Seguros, will also cover you outside it in case of theft, mugging or even fraudulent use of credit cards.  It is worth checking exactly what is covered, for example, accidental damage may not be automatically included, which is why the cost of these policies is lower.  So when your cat races through your living room, followed swiftly by your dog, and his wagging tail, which knocks the Ming dynasty vase into the sixty inch plasma screen … you may not be reimbursed!  This is another reason why expats will often favour insurance companies that specialise in meeting their needs as they will tend to have flexible underwriting departments.

Anne Hobson Insurance Services, Tenerife Telephone: 922 793 866 Address: Anne Hobson Insurance Vista Hermosa 1 Portal 3 Bajo A C/ Los Cristianos a Guaza Los Cristianos Visit Website or Send an Email