When choosing the right home contents or building insurance in Mallorca, there are many things you can do wrong.
Birgit Rudolph from the real estate service agency "Perfect Mallorca" explains why.
Which insurances are mandatory for property owners?
For individual property owners, there is no legal obligation to take out insurance in Mallorca. The situation is different for communities of owners. For them, it is a legal requirement to take out liability insurance.
Which insurance policies are recommended?In any case, it is advisable to take out combined building/house contents/liability insurance. This provides adequate cover for the risks associated with the property. Spanish insurers offer corresponding combined products for this purpose.
These are also recommended for properties in community complexes, as community insurance usually only covers a minimum of the value of the building. In addition, personal cover for the building value of your own property ensures that compensation is paid in the event of a claim.
It can also make sense not to include special valuables, such as works of art, in household contents insurance, but to take out special insurance for them.What are the differences to similar products in Germany?
The differences are in the details. Not everything that is included in the insurance cover in Germany is also covered by Spanish insurance policies. Property owners on Mallorca should therefore always pay close attention to what damage a policy includes and to what extent it covers it. Most insurance providers on the island now offer so-called „Premium“options. In addition, all-risk cover is usually available for a small surcharge. This allows most owners to sleep much more soundly.Do Spanish home insurance policies also cover damage caused by natural disasters? A major difference in the Spanish insurance system is the so-called "consortium". The consortium is a state institution and works in principle like a reinsurance policy and covers damage caused in connection with exceptional events such as storms or flooding. For example, damage caused by dripping water through the ceiling is covered by your own insurance, while damage caused by water entering the house in the event of flooding is covered by the consortium. Each insured person always pays a contribution to the consortium with their premium. This contribution is shown in the calculation. In order to choose the right product and the right insurer for the respective property and the individual situation, appropriate advice and an advisor who has access to all insurers and their products are required.
Spanish banks „oblige“ their customers to take out „in-house“ insurance What does the offer look like in terms of price and performance differences? A thorough comparison is always worthwhile, as the products sometimes differ considerably. In the case of building insurance, the purchase price of a property is often taken as the value by most insurance agents as a matter of course. For the customer, this initially sounds sensible. But it is not! In the event of a claim, the insurance company only ever pays the reconstruction value of a property. However, the purchase price is made up of various factors such as the land, building and location.
as part of mortgage or loan agreements.
products. How serious is that?
This practice is a tiresome topic, which we know well enough from our own experience. Coupling transactions - and from our point of view this is nothing else - are actually forbidden for banks. But: Without taking out the insurance prescribed by the bank, bank customers cannot get a mortgage. Or they have to accept a higher interest rate. We usually advise our clients to accept this 'insurance gag' and then, after a year, mortgage holders can easily cancel the imposed insurance policy and take advantage of a much more favorable offer. Even if this results in an increase in interest rates, customers generally save money due to the lower insurance premium.
Cheap usually only refers to the premium. The difference usually becomes clear in the event of a claim. With online insurers, customers have to take care of everything themselves. Incidentally, the same also applies to customers who have taken out their insurance at a bank branch. In our experience, it is particularly difficult for owners of a vacation property in Mallorca to settle a claim remotely with the online providers/banks.
Choosing the right insurance is as individual as each property. To find the right product, the owner would have to contact various providers themselves or contact us directly. Thanks to our cooperation with an insurance broker, our customers have access to all products tailored to their needs. This saves time, nerves and, above all, money! Further information:
"Perfect Mallorca"
Birgit Rudolph
Tel. 971 828 124
