How to get a correct cover when insuring your home:
The Sums Insured: Many problems following a loss can be traced back to not having the correct sums insured. Most policies will contain an ‘underinsurance clause’ which will serve to penalize the client if, in the event of a loss, the client was deemed to be underinsured. It’s worth making sure that the figures are right. But how?
Buildings should be insured on a “full reconstruction basis” (it means what it would cost you to build the property from scratch, including architect’s fees, building licenses etc.).
Contents should be valued “on a replacement cost as new”, and this should include furniture, audio/HiFi, sports equipment, rugs, curtains, linen, personal effects, clothes, books etc… Remember that for most Spanish companies, kitchen and bathroom fittings are deemed to be ‘contents’.
The scope of cover: For those used to buying insurance in the UK, there are considerable differences between an Anglo Saxon policy and a Spanish/European policy: the Anglo Saxon policy tends to be written on an ‘All Risks’ basis whilst the Spanish ones tend to be on a ‘Defined Risks’ basis.
Liability: This is often overlooked, but really should get much more attention. Liability claims on home policies tend to be quite rare, however, given the nature of the risk it is impossible to know the extent of your exposure, as your liability towards third parties has NO limit.
Spanish policies tend to have lower liability limits than UK policies, however, in recent years they have made higher limits available, and the cost of homeowners’ liability is relatively low. Our advice: buy the highest limit you can.
You may have heard the quote: “it is unwise to pay too much, but it´s also unwise to pay too little”. When you pay too much you lose a little money that is all. When you pay too little, you sometimes lose everything.
Remember: saving a few Euros on the premium can mean losing tens of thousands in the event of a claim. More information here.