After making a major purchase like buying a holiday home in Spain, you might not want to think about spending even more, but home insurance is a necessity, not a luxury.
Once you’ve made the decision to buy an overseas property made there are a number of things you will need to do, such as arranging the finance and sorting out the legal side of things and choosing fixtures and fittings if you are buying off-plan, as well as generally enjoying the glow that comes with fi nally realising a dream. However, obtaining the correct level of buildings and contents insurance to protect your investment must be one of your priorities. You wouldn’t dream of leaving your property and possessions underinsured in Britain, so why take the risk with your property overseas?Because you’re buying abroad, there are several things you’ll need to think about in order to ensure your new home is properly covered.
Should I use a British insurance company or insure with a local Spanish one?
Obviously one of the biggest issues to consider is the language – without fl uent Spanish you might find it diffi cult to understand the level of cover provided by a policy sourced locally through a Spanish broker, or agente de seguros. This could prove frustrating and potentially costly if you don’t actually have the cover you thought you’d signed up for. In this instance it may be better to use a UK-based insurer or broker so you understand the language, receive documentation in English and pay the premium and receive any claims payments in sterling.
Many local insurance policies tend to be cheaper than products offered by British insurers. But however tempting it is to try and save a few pounds you should balance this by looking at the cover you are buying. British insurers tend to offer wider cover and include useful extras like emergency travel cover – so if your property suffers damage then your costs for getting there to supervise repairs will be covered.
How much should I insure for?
You should insure for the rebuilding cost of your property – this is often less than the market value of the property. You should take into consideration the cost of rebuilding all outbuildings, swimming pools, gates and fences and so on. Don’t be tempted to cut corners and insure for less than the true value of rebuilding. If you have to make a claim then your
insurer may not settle your claim in full if you haven’t insured for the correct amount. A local builder or surveyor may be able to help you assess this, or if you had a survey undertaken when you purchased the property it may include an insurance valuation.
Community fees that you have to pay when you own a property in an apartment building or an urbanisation with communal areas may include a charge for buildings insurance but it is unlikely that they will to extend to include fi tted fixtures and fi ttings such as wardrobes, kitchen units or bathrooms in your private property – in this instance you will need to arrange cover separately.
If you own a swimming pool, check you have appropriate insurance. Most British policies will include cover for swimming pools within the buildings cover. However, some Spanish policies exclude pools and outbuildings, so be alert.
Don’t forget to insure your contents for their full replacement value: if you underinsure then you run the risk of not being able to claim for their full value in the event of a loss.
How can I keep the costs down?
Home insurance discounts overseas operate in much the same way as they do in Britain: the higher the level of security, the greater the saving you can expect to make. The two most common ways of improving physical security are through the installation of a reputable alarm system and bars over the windows. Make sure the bars are solid and embedded in the
wall rather than hollow and attached to the exterior. It’s also worth checking whether a higher excess on your policy will reduce your premium. Most policies have a standard excess of £50 or £100 – choosing a £200 excess may reduce the premium by as much as ten per cent.
Take a little time now to check the details of your policy against these pointers and you will be able to fully enjoy your Spanish home, safe in the knowledge you’ve got it covered.