Home insurance in Spain, explained in plain English

Matching cover to your property situation

The same house needs different cover depending on who lives in it and how often. Start here rather than with the premium.

Two things travel across every row: the sums insured have to be right, and the property's actual use has to be what the policy describes. Almost every declined or reduced claim traces back to one of those two.

Depth on each situation sits on its own page — buildings, contents, holiday home, landlord and non-resident cover.

Getting the sums insured right

This is the decision that governs everything else, and it is set from the wrong number more often than not.

Buildings should be insured for rebuild cost — demolition, clearance, rebuilding to the current specification, professional fees. Not the purchase price and not the market value, because both include the land. On coastal property in particular, rebuild cost is often well below market value, so insuring for the sale price means paying for cover you cannot use.

Contents should reflect the cost of buying everything again, not what you paid or what it would fetch second-hand. The reliable method is to walk the property room by room and total it — kitchens, wardrobes and electronics accumulate value quietly, and most households finish two or three times above the figure they would have named from memory.

Under-insuring has a specific consequence here. Where the insured sum is below the value of the insured interest, Article 30 of the Insurance Contract Act provides for compensation to be reduced in the same proportion. The part that surprises people is that this bites on partial claims too, not only on losing everything — so the figure matters for a burst pipe in one bathroom, not just for a fire that takes the roof.

Note: The parties may agree to exclude the proportional rule in the policy or afterwards, but do not equate valor total, primer riesgo or valor de nuevo with an automatic waiver unless the individual policy wording confirms it.

Water damage between neighbouring flats

This is the most common home insurance claim in Spain and the one owners are least prepared for. It deserves its own explanation.

The typical case: a pipe or appliance fails in one flat and the water appears in the ceiling of the flat below. Three parties can be involved — the flat where the leak originated, the flat that suffered the damage, and the community if the failure was in a shared installation. Each may have a different insurer.

What determines who pays is where the failure occurred, not where the damage showed. A pipe inside a private flat is usually that owner's responsibility; a riser or a shared drain is usually the community's. Establishing which it was often needs a leak-detection inspection, and most policies include or arrange one — ask, because paying for it yourself is unnecessary.

Practically: report it to your own insurer immediately even if you believe it is your neighbour's fault, photograph everything before drying out or repairs begin, and tell the community administrator if a shared installation might be involved. Do not agree costs directly with a neighbour before the insurers have spoken — an informal settlement can cut across cover both of you have already paid for.

• Report to your own insurer first, regardless of whose fault it looks like.
• Photograph the damage before anything is dried out or repaired.
• Ask about leak detection rather than paying for it yourself.
• Involve the administrator if a shared installation may be the source.
• Do not settle informally with a neighbour before insurers have engaged.

The community boundary: where its policy stops and yours begins

If you own a flat, part of your building is probably already insured by someone else. What is not obvious is how far that reaches.

Where a community policy exists, it typically covers the structure and the common areas according to its terms. What varies considerably between communities is how far it reaches into an individual flat — some cover the shell only, some extend to fixed installations inside it, some include a measure of liability for owners.

Read the community's own documentation rather than relying on what a neighbour tells you. Ask the administrator for the policy summary, look specifically at what it says about the interior of private units, and insure whatever it leaves. Guessing produces one of two outcomes: paying twice for the same structure, or finding a hole in the cover at the worst moment.

Note that a community policy does nothing for your contents, and nothing for your liability as a landlord if you let the flat.

One further point that catches apartment owners: a community policy is renewed and varied by the community, not by you. A change voted through at a general meeting can alter what your own policy needs to cover, and nobody will write to tell you. It is worth a glance at the summary each year rather than once at purchase.

Extraordinary risks and the Consorcio

Some of the events people most worry about are not handled by your insurer at all.

Certain catastrophic and extraordinary events are handled through the Consorcio de Compensación de Seguros rather than by the insurer directly, funded by a surcharge already included in your premium. You cannot opt in or out.

Eligibility depends on the event meeting the qualifying conditions, so this is a defined mechanism rather than blanket protection against every natural event. An ordinary storm is usually your insurer; a declared extraordinary event may be the Consorcio. After a major weather episode your insurer will tell you which route applies, and the claim is made accordingly.

What this means in practice is that having a policy at all is what gives you access to the mechanism. It is another reason not to let cover lapse on a property that stands empty for months.

Pools, terraces and liability as an owner

Liability is the cover owners think about least and the one with the least predictable ceiling.

As owner you can be exposed if the property causes injury — a failing balcony rail, a loose tile onto a public path, an electrical fault, and above all a pool. A visitor, a tradesperson or a neighbour injured at your property is a claim against you, and unlike a building claim it is not bounded by the value of the property.

Do not accept whatever liability figure the policy arrives with. Ask what it is, ask whether it is adequate for a serious injury claim rather than a broken window, and raise it if there is a pool. Ask too whether the insurer expects safety measures as a condition — fencing, a cover, a gated approach — because a condition you did not know about is only discovered when it is being relied on against you.

This matters more, not less, when you are not there. A problem developing over months with nobody to notice it is the classic route to an avoidable liability claim.

Tradespeople are the exposure owners forget. Someone working on your property who is injured there may have a claim against you as owner, and that is a different question from whether they carry their own insurance. For any significant work, ask the contractor for evidence of their own liability cover before they start — it costs nothing and it is the single easiest gap to close.

Buying a property and insuring from completion

The gap between signing and insuring is short, avoidable and surprisingly common.

Arrange cover to be in force from the moment of completion at the notary, not from the day you move in or take furniture over. Risk transfers with ownership, and an empty newly purchased property is exposed to exactly the events people insure against.

A mortgage lender may require insurance covering damage to the mortgaged property as a condition connected with the loan, but it cannot require you to use its own insurer. It must accept an equivalent alternative policy without charging an assessment fee for doing so, and it must not worsen your loan conditions for that reason. Shop the cover and give the lender evidence of it.

Set the rebuild figure at purchase rather than accepting a default. It is the moment you have surveyor input, builder quotes and the paperwork in front of you, and it is far harder to revisit properly later.

When something happens: how a Spanish property claim runs

The sequence is fairly consistent across insurers, and knowing it prevents most of the delay people attribute to the insurer.

Notify within the period your policy sets, which runs from when the damage occurred or was discovered rather than from when it becomes convenient. This is the single most common failure on a property owned from abroad, where a February leak is found in April.

An assessor (perito) may inspect, depending on the size of the claim. Small claims are often handled on documentation and photographs alone, which is why photographs taken before any drying out or repair are worth more than any description afterwards.

Emergency work to prevent further damage is normally permitted and expected — you are not required to leave water running into a property while waiting for authorisation. Keep the invoices, photograph what you did, and tell the insurer promptly.

Note: If nobody can access the property, everything above slows down. A local keyholder is worth more to a claim than a higher sum insured.

Common mistakes

• Insuring for the purchase price. Buildings cover is rebuild cost. The land does not burn down.
• Guessing the contents figure. Walk the rooms and total replacement cost; the guess is nearly always low.
• Assuming the community policy covers your flat's interior. Read the summary, insure the gap.
• Not declaring a let, or describing tourist letting as renting. They are different risks and different products.
• Letting cover lapse on an empty property. It also removes access to the Consorcio mechanism.
• Accepting the default liability limit with a pool on site.
• Repairing before photographing. The evidence disappears with the damage.
• Never revisiting the sums after an extension or renovation. An index adjustment does not know what you built.

A checklist before you commit

• Is the buildings sum based on rebuild cost, and when was it last reviewed?
• Does the contents sum reflect an actual room-by-room total?
• What are the per-item and valuables limits, and does anything need specifying?
• What does the community policy cover, and what does that leave me?
• What is the unoccupancy period, and what precautions does the policy require during it?
• What is the liability limit, and does it account for a pool or terrace?
• Is the property let — and if so, long-term or tourist?
• Who can access the property, and does the insurer have their details?
• What is the notification deadline for a claim, and from when does it run?

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