Insurance
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
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 (EHIC) 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 go to a private clinic or private hospital, your EHIC card will not be accepted, and you will have to pay for treatment.
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.
You can normally get private health insurance in Spain even if you have pre-existing medical conditions. In fact, when you apply, you may not even be asked about any health issues. However, most policies have delay in treatment clauses built in for non-emergency situations.
If you are working legally in Spain, you are entitled to free health care. You will need to register with your local health centre, and obtain a Tarjeta de Salud (Health Card). If you are a pensioner from an EU country, you can obtain an S1 authorisation from the country paying your pension. This will entitle you to health care in Spain. You need to make an appointment with the INSS (Spanish Social Security) to receive your Tarjeta de Salud.
Buildings Insurance
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 your property is part of a community to which you pay community fees, your property's building insurance is normally paid by the community.
Contents Insurance
Contents insurance will cover you in the event of loss through theft, fire, accident etc.
Motor Insurance
Having valid motor insurance cover is compulsory for all cars in Spain. Note that it is the vehicle that is insured, rather than the driver. Once a car is insured, any licensed driver over a certain age, as determined by the insurance company, and usually 25-30, can legally drive the car. This also means that having insurance on your own car does not mean you will be insured driving another vehicle. If the other vehicle is not insured, you are not covered to drive it. Note also that vehicles must be insured even if they are not being used and parked off-road.
Commercial Insurance
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 factors such as third party liability.
Buying property in Spain - First Steps - Choose your area
Decide on the type of property you want and see what is available
Calculate your budget and arrange finance
Arrange an inspection visit to see available Spanish properties
Arranging a mortgage on your Spanish property
Tax considerations when buying Spanish property