Before signing: study the contract well, reading all the general and individual clauses. Ensure that you choose the most suitable product for your needs.

Before signing-up for insurance for your house, it is important to study the contract, reading all the general clauses (common for all policies), and individual clauses (specific for each policy) along with its limitations and exclusions before signing anything.   Do not be left with any doubts, is important that you seek explanations for any clauses that you do not fully understand.   It is also advisable to understand the warranties/undertakings now - at the time of choosing the insurance, in this way, you will ensure that you choose the most appropriate product for your needs, without contracting for warranties that are not useful in your circumstances,  I.e., exclusions and limitations , you will be paying extra for warranties that you do not need.   Next, we suggest a few basic guidelines to you to make the entire process as doubt-free as possible. 

When a mortgage is involved certain financial organizations try to force you to take insurance with their preferred insurance broker.   Do not sign any policy without comparing the cover offered with that offered by other organisations.

Concepts and clauses

When you complete the questionnaire provided by the insurance company, it is important that you respond with as much detail as possible about the characteristics of the house, building and of the contents of your property. Any precise data given at this stage can solve problems later, if when making a claim the Fairness Rule should be applied . That is to say, the law states that if the insured knowingly omits some important detail, that if it were known to the insurer would call for a greater premium to be paid, the company can apply the "rule of fairness", that provides in case of a claim, the claim will be proportionally reduced.  In order for this rule to be applied it must be proved that a person has acted in bad faith.

Which insurance?

Household multi-risk insurance, normally cover the risks that affect the house, the furniture, as well as determined acts that can be carried out by the relatives of the person taking out the insurance.   In order to choose the best insurance and to pay the right price, some important factors should be considered, that surely will help you in making adecision:

If the house is to be rented out, it would be good to choose insurance that includes:

The renter’s contents/property at new cost.   The items would have to be valued on a new to buy basis , an inventory (including the value) of the items would have to be made.

The owner’s contents such as electrical goods, furniture etc because in case of a claim the insurer would respond to him on these.  In this case you should insure the actual value as this is the only thing the insurer would require.

It is important to look for the most suitable cover, taking into account :

civil responsibility of the renter must cover a minimum amount of 180.303,63 euros, with a limit per victim above 60.101,21 euros.

Water-damage must cover 100% of the amount without tax exemptions nor limitations for the repair and fault finding of breakdowns or in the damage to taps

Ensure a first risk amount that covers damages to cover the claims of the owner that are excluded from the undertaking of civil responsibility of the renter.   In this type of insurance, a prior amount for such items is agreed with the insurer therefore it is eliminated from the infrainsurance (the insured sum is less that the true value of the insured item).  In case of a claim the insurer pays that amount at the most and it cannot apply the proportional rule.  

If the house is owner-occupied,  the best choice will depend on:

In case of being a single-family home : again insure the building and contents at new value . Verify the value of the house without including the land and compare the most suitable cover, taking into account :

civil responsibility of the renter must cover a minimum amount of 180.303,63 euros, with a limit per victim above 60.101,21 euros.

Water damage must be 100% covered by the capital without tax exemptions nor limitations in the repair and fault-finding or in the leakage from taps.

In case the community does not have good insurance cover then the following should be considered:

In community insurance, the insured amount must be sufficient to re-build the entire building in case of a total disaster.

It does not have all the coverage that you are interested in; like civil responsibility of the community,  the owners and third parties, water-damage, etc. If you find that the community policy does not sufficiently cover aspects, it may be necessary to insure the contents of your home for new value replacement and and the building as first risk, to complete the infrainsurance in the community policy .   Choose the most suitable cover, above all ,as mentioned civil responsibility and water damage to at least the same level as mentioned in other cases.

Multi-Risk Household . : It is important to check the limitations, tax exemptions and the exclusions of the warranties of your policy.

Basic Undertakings:

It is important to review the limitations, tax exemptions and the exclusions of the warranties of your policy, ensure you have the following basic warranties:

Damage by fire, explosion and lightning:  all costs incurred by these events should be covered (the contents as well as the building).

Acts of vandalism or deliberately damaging acts .   External impacts, including those caused by vehicles, planes and boats or similar objects.

Extraordinary and catastrophic risks: earthquakes and tidal waves (extraordinary floods) volcanic eruptions....

Personal assistance :  Transfer or repatriation of the deceased insured and the other companions of the insured during temporary trips.

Transfer or repatriation of the insured in case of disease or injury of the insured.

Medical assistance in the case of injury or disease of the insured whilst abroad.

Prolongation of the stay of the insured abroad in the case of injury or disease.

Individual accidents : through this warranty, which will in no event provide a greater benefits that those which are offered by Social Security,  the death or permanent disability of persons named on the Individual Insurance schedule of the policy are covered , when such accident occurs within the insured house.

Accidental death: covers the loss of life of the insured, which occurred as a result of an accident or as a direct result of wounds or injuries suffered in the same.

Permanent disability:   covers the loss of physical capacity of the insured as a result of an accident, when loss of limb or absolute and permanent loss of organ function result from the same. .

Community Insurance : before electing to take out multi-risk community insurance you will need to value the building  and decide which warranties you wish to be covered by.



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Guide to buying a HOUSE
The Arsenal has prepared this guide targeted at informing consumers who are interested in real estate purchases about their rights an obligations.


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