Insurance is a very important aspect often overlooked by would-be buyers. It is a fact of life that accidents and unexpected illness or death can happen to anyone and without adequate protection in place can result in serious financial consequences You need to consider several different types of insurance
Life insurance (more correctly life assurance) cover is something which should be considered, especially for the main earner in a family. Life cover can be used to ensure that any outstanding mortgage balance can be repaid in the event of the chief earner's death. You should also take into consideration the cost of a funeral, especially if the remains are to be repatriated to your home country.
The cost of life assurance will very depending on a number of factors
- Type of life policy
You can opt for different types of life cover.
- Whole of life policies are the only types which guarantee a payout in that you are covered until death provided you continue to pay your premiums.
- Term assurance policies provide cover only up to a specified date. This is often the maturity date of a mortage. The cover can be for a fixed amount or can be tied to your reducing mortgage balance.
- Single life or joint life cover. When just one life is covered by the policy this is referred to as single life cover. Joint life policies provide cover for more than one life. The sum assured may be paid out only on the first death, or may be paid on all deaths. These policies normally provide cover up to a specified date.
- Age and health of the life assured.
In general, the older a person is when taking out a life policy, the higher the premiums will be. Any past or present medical conditions may also affect the premiums.
- Amount to be paid in the event of death.
The higher the sum asssured, the higher the premium.
- Age up to which the life is covered.
- Occupation of the person(s) covered.
Critical Illness Cover
Critical Illness Cover is normally available as an add-on to your life assurance cover. Whereas a life policy pays out only on the death of a person, critical illness cover pays out should the person covered develop any of a number of specified medical conditions such as heart attacks, strokes etc. This is particularly useful if the main earner relies on income derived from work to meet mortgage and other loan repayments and subsequently suffers a medical setback which prevents them from working.
Mortgage Protection Insurance
This type of insurance may be taken out to cover you in the event of you being unable to meet your regular mortgage repayments, for example if you lose your job. The conditions under which such policies will pay out are quite restrictive. Additionally, there is usually a maximum number of months for which the insurance company will pay your mortgage repayments. However, having such a policy may give you time to sell your property in the event of financial problems.
Private Health Insurance
If you travel to Spain from any other EU country you can avail of the EU's common health care insurance free of charge. You need to obtain a European Health Insurance Card in your home country before travelling. This cover is intended only for short visits and applies only to treatment in public clinics and public hospitals. If you spend a lot of time in Spain you need to consider taking out private health insurance. This type of cover is very popular in Spain and relatively inexpensive. Levels of cover differ so you need to consider just what you feel comfortable with. If you do not have cover and you are not working in Spain and contributing to the Social Seguridad system, you will have to pay for all medical costs.
If you are taking out a mortgage on a property the lender will insist on you having buildings insurance. Even if you are financing the property without borrowings, it is somewhat foolhardy not to have this cover. If you are buying a property in a community (e.g. an apartment in a complex), the community normally provides buildings insurance.
Contents insurance will cover you in the event of loss through theft, fire, accident etc. Contents insurance can also cover you for damage to adjacent properties. For example, if a leak develops in your apartment and causes damage to apartments around you, your contents insurance should cover you for compensation costs you have to pay. However, check with the insurer that this type of cover is included.
Having valid motor insurance cover is compulsory for all drivers in Spain. If you bring a car from your own country, check that your local policy covers you for foreign use. If you intend to keep your car in Spain, you need to register it with Spanish authorities and apply for Spanish plates. Failure to do so can result in your car being impounded and destroyed. Failure to legalise your car in Spain may also negate your insurance policy.
If you intend to buy or start a business in Spain, then you may require commercial insurance. Bear in mind that you need to consider not only 'normal' risks such as fire and theft, but also other factros such as third party liability.