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How to calculate home insurance in Spain

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Our property is often the biggest investment we make in our lives and not only could we lose it, for example, in the event of a fire, but we could also lose everything in it, such as our memories, photos or important legal documents.

It is important to have insurance, depending on your needs and your personal situation it may vary in price. If you are wondering how home insurance is calculated, this post is for you.

If you are reading this then you probably already realize that it makes sense to organize home insurance in Spain.

While we cannot replace souvenirs or photos, we can help ensure that you are adequately protected so that your property is rebuilt and the costs of reproducing your important legal documents are covered.  For the calculation of costs, we will tell you how home insurance is calculated.

The main protections of home insurance in Spain are usually split into building insurance and content insurance, you can contract them independently but it is more usual and recommended to contract both in the same policy.

How is home insurance calculated? Buildings cover:

If you want to know how home insurance is calculated in this case, you should know that to calculate the coverage of your buildings you need to calculate the cost of construction and not the resale value.

The rebuild value may be less than the market value. This is because you do not need to buy the land again, if your property is destroyed you already own it. The market value of the property is affected by many factors that do not alter the rebuilding cost, for example, the area may be very desirable.

Perhaps you have good schools nearby, some wonderful views or good connections to other towns and cities, these variables do not change the costs of rebuilding but they do affect the market value and therefore the insurance, so it is important to realize all these factors to know how home insurance is calculated.

how-is-home-insurance-calculated

The costs of the reconstruction should also ensure that the house insurance includes an amount for cleaning up the debris, planning permission, architect’s fees, surveyors and VAT (VAT plus other related costs).

Insurance companies will usually calculate the estimated cost per square meter based on the code. This should take into account the quality of the construction, if the materials used are of higher quality than normal, then this should be taken into account. It is important to take this into account when considering how home insurance is calculated.

Do not be tempted to undervalue your property when taking out the insurance. If, for example, the insurance company has suggested a figure for rebuilding, do not go below that indication. There are two reasons you should not do this:

  • If you under insure and you have to make a claim, then the amount of the payout will be insufficient to rebuild the house.
  • When you take out a policy, the insurer expects the premium paid to reflect the risk you are assuming. If the property is valued at 300,000, but you are paying a premium for a policy of 150,000, then you are under-insured.
  • In that case you will have paid the insurance company a lower premium than the actual risk is worth. This would allow the insurance company to reduce the payment they should give you, so not only would your payment not be enough to rebuild your property, it could be reduced even further because you have not paid the correct premium for the risk.

In the rare case that you feel that the insurance company’s construction value is too high, we do not recommend that you reduce it, but choose another company instead.

For this reason, it is important to know how the home insurance is calculated, to avoid unnecessary payments and expenses.

how is home insurance calculated in Spain? Content insurance

To calculate the amount of coverage of the contents policy you must go from room to room adding up the value of your belongings, this is how home insurance is calculated.

Go into a room and take a look at what’s there: curtains, curtain rods, closets, clothes, dressers, beds, mattresses, shelves, etc. Add up and write down the figure. Then go to the next room and do the same.

It is particularly important to remember that your kitchen is part of the contents of your property and not part of the building’s insurance.

When it comes to collectable items, antiques and jewellery it might be necessary to have the items valued, this will depend on the individual insurance company. An insurance company may want an individual list of all items of jewellery, watches or collectables with an individual value of more than 3,000 euros.

To know how the home insurance is calculated, the objects mentioned above must be detailed by the insurance company’s policy. You may also be asked to provide an estimated value in the case of jewellery, this means that it must be appraised by a reputable local jeweller.

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Again, do not under-insure as in the event of everything being destroyed then you will not receive sufficient to replace your losses.

How is home insurance calculated: In summary

Insurance is not an emotional purchase. When you take it out, it gives you peace of mind and makes you feel more secure. This feeling increases when you remove the right level of coverage and pay the corresponding premium.

Please think about the coverage you need to avoid disappointment at what is likely to be a complicated time.

Now that you know how home insurance is calculated you should know that in Spain there is a wide variety of insurance companies to suit your needs.

At BMI Spain we can help you find the most appropriate insurance company for you and your family.

Do not hesitate in contact with us if you have any doubts about healthcare in Spain for expats, our BMI Spain team will be pleasant to help you.

Registered address vehicle Spain

How to change registered address of your vehicle in Spain

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How to change registered address of your vehicle in Spain

It is important to keep your address records up to date in respect of your vehicle, especially if you have moved from one town or province to another.

You can change your address details in one of several ways. Traditionally, you had to make an appointment at the Regional traffic Office (Jefatura Provincial de Trafico). This meant taking time off work and perhaps travelling a significant distance with all the correct paperwork.

More recently, it has become much easier to make these administrative changes. Many town halls have an agreement with their regional traffic Office to collect the paperwork from the local population to make the change of address much simpler.

Not all town halls are signed up to the scheme but you can check to see if your town hall is by visiting this website (Town halls with agreement to process paperwork for Trafico).

If your town hall is on the list then you can change the address for your vehicle. You will need to complete a “solicitud de cambio de domiciliacion” and provide originals and copies of various documentation.

The completed form should then be returned to the Town Hall along with the following paperwork:

  • The original permiso de circulación (all pages including the front cover)
  • The original ficha técnica (all pages)
  • The certificate of Empadronamiento (which you can obtain from the Town Hall, of course)
  • Your original NIE document

Remember, you should be paying the taxes for your vehicle in the town where you live so it is important to keep the records up to date. Furthermore, if the authorities need to get in touch with you, then if they have the wrong address you will not receive the communication.

BMI brokers insurance give personal attention answering your questions to find the best insurance that fits your needs.

 

Ventajas de contratar un seguro

Three reasons to buy life insurance

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A proven product that everyone should protect themselves with. Life insurance is a necessary purchase that has the benefit of giving you and your family peace of mind.

There are many different types of cover that can be tailored to suit your needs and lifestyle. Life insurance not only provides financial protection in the event of death but it is also a savings product that offers benefits that are becoming ever more extensive and customisable, so it is not surprising that, after car and home insurance, it is the third most contracted insurance cover in Spain. The average profile of a person who contracts life insurance is a married male aged between 35 and 44 years old, but it is never too late or early to take out a policy.

1. Arrange a mortgage to buy a house In Spain, six out of ten homes are bought with a mortgage.

In this case, it is advisable to take out life insurance because, in case of death or permanent disability of the person who contracted the mortgage, the insurer will take over the payments to the bank and remove your partner or relatives from the economic responsibility that could be difficult to continue with. In fact, with most banks it is a pre-requisite as a guarantee before signing the mortgage. Until recently, banking entities conditioned their mortgage lending with an “obligation” to contract some linked products, such as Life insurance. But since a few years ago, with the approval of the European Parliament of the Mortgage Credit Directive, banks are prohibited by law from linking a mortgage to the purchase of insurance. You only need that your insurance company includes a clause in your policy registering your lending bank as the mortgage beneficiary. In that way, you comply with the request of the bank but you also save money. You could even save a difference of 700 euros as the products offered by the bank can be up to 300% more expensive.

2. Start a family Life insurance can also be a guarantee for those who are thinking about starting a family.

It should be taken into account that raising a child in Spain can be expensive. It has been estimated that a baby can cost 14,266 euros during its first year of life and 14,056 euros during the next two. On average, a child can represent the disbursement of 1,183 euros per month during its first three years, which represents 80.78% of the average monthly net salary of a worker. It will depend on each person’s standard of living, but before the child turns 18 the parents could have spent between 115,000 and 350,000 euros. If at any time one of the parents dies, it will be difficult for the family to maintain the same rhythm of life. In those cases, although the personal loss will be irreplaceable, life insurance could guarantee the necessary capital to meet family expenses. With Liberty Seguros, even if the insured dies in an accident along with his/her spouse and they have children younger than 18, the beneficiaries will receive double the sum insured.

3. Protect your income level Last year there were 3,796 serious occupational accidents in Spain. Of these, 618 had fatal consequences.

The possibility of suffering an accident at work or outside that causes a permanent or temporary disability exists, so it is a wise choice to protect your income level. It will depend on each policy, but the insured can receive an advance payment of the contracted capital in case of temporary or permanent incapacity that prevents them from working and, therefore, affects their income, whether as a result of an accident or illness. In fact, with Liberty Seguros, the insured will be advanced the sum insured for death if he/she is diagnosed with one of the following serious illness or needs one of the following operations: cancer, heart attack, cardiovascular accident, kidney failure, bypass surgery, paralysis and transplant of vital organs, in accordance with the terms established in the special conditions of the policy.

 

Sources: (2018, May) Profile of life insurer buyer in 2017. In: ICEA. (2018, February) Almost 42% of retirement pensions in Spain are lower than the SMI. In: El Economista. (2018, February) Occupational Accident Statistics 2017 in Spain. In: GTG. Paola, M. (2017) How much does it cost to have a child? In: La Vanguardia. (2013) A burial costs an average of 3,545 euros. In: OCU.

https://www.libertyexpatriates.es/opencms/opencms/noticias/Three-reasons-to-buy-life-insurance.html

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When the community has a policy. Do I need home insurance in Spain?

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A community policy in Spain is designed to protect the property of the community.

That is the overall building structure and communal areas. However, it does not usually cover your own windows and doors, nor your contents such as clothes and electronic goods, or the kitchen, as examples.

Therefore, your contents will not be covered by a community policy.

Furthermore, if there is a leak from a pipe in your property, that subsequently damages the property below for example, then you are most likely liable to pay for any damage done to your property and your neighbours.

The community policy will cover communal pipes and pipes in communal areas, but it will not cover damage caused from broken pipes within your home. They are your responsibility.

As a result we would recommend that as a minimum you take out a first loss home insurance policy in Spain to protect you in such cases as well as contents cover.

funeral in spain

What happens if one of our family in Spain passes away?

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We live in a wonderful country with fantatsic weather and an enviable lifestyle, which means we normally give little thought to what happens if one of our family in Spain passes away.

Would you know what to do? Who do you advise? What is the legal procedure? What if the recently deceased wanted to be returned to their native country for burial?

These are all questions we should give some thought to before something happens.

During a traumatic time, not knowing the answers to the above questions will only add to the distress and frustration at a time when it would be most unwelcome.

It is not just a case of writing a Spanish will. Although that is very important. You should make someone aware of what you would like to happen to you should you pass away.

Funerals are organised very quickly in Spain, typically 24 to 48 hours leaving little time to organise everything. If the deceased had wanted to be returned to their native country then organising transport to that country is going to be complicated and expensive, unless it has been planned for.

When someone dies a doctor is called to confirm the death and issue the death certificate. From then you are normally put in touch with local funeral directors. How much does a funeral cost? Do you know what this process involves? What is your grasp of the local language like? Will they understand and respect the wishes of the deceased? Do you know what you will be asked to sign?

If the answer is any of these questions is “I don’t know” then please read on.

You might want to consider putting in place arrangements that will avoid all of the potential problems of having to make quick decisions, in a foreign language at a highly emotional time by making arrangements now.

There are generally two ways you can organise profesional help now for these difficult times of life that face us all in the future.

It is possible to organise funeral arrangements now that fit with your family’s particular requirements. One way is to make a monthly payment to a company that will take care of these funeral arrangements and the costs for you if you pass-away.

The alternative is to decide make a one off payment to a Company that will take care of your funeral in due course, fixing the Price now.

The advantage of the monthly payment option is that you don’t pay for the full funeral cost up front. The payments are revised from time to time to take into account your age so they will increase as the years go by. You have the flexibility to change the company providing the service if you feel the premiums are too expensive or the cover is no longer appropriate.

The benefit of paying a one off amount is that you do not have to worry about an increase in premiums as you get older, or an increase of costs of a funeral.

With a 24 hour contact number, in a language you understand you can feel comfortable that at such a delicate time someone who does speak the local language will be there to help you through.

These types of policy include a variety of options including the following:

  • No medical
  • Up to 8 people on the same policy
  • Mortuary expenses
  • Funeral arranagements
  • Repatriation if included in the policy

If you would like to discuss either or both of these products further please contact us at our Mijas or Marbella office.

Are you self employed and think private medical insurance in Spain is too expensive?

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Well, you might be pleasantly surprised!

 

One of our insurance partners, who specialise in providing private medical cover, is offering the self-employed and their immediate family a very competitive product.

 

Not only are the premiums very attractive but you may be entitled to off-set up to 500 euros of annual premium against your tax liabilities, making the product even more affordable

 

This is full private medical insurance. No co-payments when you visit the doctor or have a diagnostic test. You pay the monthly premium and that is it.

 

It also includes 20.000€ of emergency worldwide cover and no grace periods except in the case of pregnancy.

 

The normal underwriting conditions apply and there must be a minimum of three members in the scheme to qualify for this product.

 

Remember, with the possibility that up to 500 € of premiums can be used in your tax calculations the actual cost could be even less.

 

Below is a table to help you calculate the cost

 

 

Age

Monthly Premium per person
0 to 19 years 39.01 euros
20 to 49 years 47.73 euros
50 to 54 years 56.91 euros
55 to 59 years 68.39 euros
Older than 59 years 108.33 euros

 

 

This offer is only available until the 31st July and if you are interested in knowing more about this offer or would like to take out a policy don,t hesitate to contact me

 

Kind regards

How many days are you covered for hospitalization in your private health insurance?

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Prolonged hospitalization constitutes a grave concern worldwide because it generates negative effects on the health system such as, for example: increase in costs, deficient accessibility to hospitalization services, overload of emergency services, and the risk of adverse effects

The causal agents of extended hospitalizations found with higher frequency are: delay in the performance of surgical and diagnostic procedures; need for attention in another complexity level; social-family situation, and the age of the patient.

 

When you take a private health insurance don’t look just the price. Although all the insurance companies could be the same, the covers are very different between them like the days of hospitalization which is one of the most important covers. Sometimes a patient has paid the hospital room having covered the contracted days in his insurance policy.