In Spain, as in every country, some insurances are obligatory. Vehicles have to be insured, for example, and foreigners applying for residency here will need health insurance unless they are employed, self-employed or are entitled to reciprocal cover from an EU country.
Others are optional. You don't have to insure your property (although if you use it for holiday lets you may find insurance is one of the conditions for registration), or your dog, and you don't need to take out travel insurance if you go anywhere.
Opinions are divided in these cases, with some people wanting the reassurance that if anything happens they will be covered, while others say the money they save on premiums over the years will cover any costs and they quote examples of insurance companies not paying out anyway in the case of some claims.
Whatever your feelings on this, there is no denying that insurance is a specialist field, and there is a great deal more to it than it first appears. Take motor insurance, for example. Did you know that you need insurance even if your vehicle is unused and kept in a garage or parking space?
BMI Insurance Brokers explain that foreigners in Spain need to be aware that all cars in this country must by law at least be covered by a Third Party policy that covers their Civil Responsibility, and that failure to comply can result in large fines. The only vehicles which are not obliged to have insurance are those which have been registered with the Spanish traffic department as being temporarily or permanently 'de baja', or officially no longer in use.
These rules apply to Spanishplated cars. However, as Wendy of EU Insurance Direct in Elviria reminds us, British residents of Spain should bear in mind that they should not be driving a UK-registered vehicle, and should also swap their UK licence for a Spanish one: «If you have a British driving licence and are resident in Spain it has to be changed to a Spanish one. However applications had to be in by the end of last year and for those who missed the deadline, it is not possible at the moment to make the change. We have been told that we have until June to get ourselves sorted but with the doors closed on new applications the situation is now very unclear,» she says.
Rafael Nadales of Liberty Seguros says anyone planning to drive to Spain from the UK or vice versa should also be aware that they will need a Green Card now. This is extremely important. It is not necessary for EU citizens driving in the EU, but as the UK is no longer part of the European Union, it is essential to have one.
As mentioned earlier, health insurance is now compulsory for foreigners from some countries who want to become officially resident in Spain, and this now includes Britain.
Cover varies and so does the cost, so it is best to shop around. It is a false economy to take out the cheapest policy if you then find it does not cover you for everything you need if you are ill. Nevertheless, it can be pretty expensive.
It is best to take professional advice on suitable cover, taking into account your age and medical history, before signing up for anything, to avoid unpleasant surprises at a stressful time.
If you own a property as a second home or for holiday lets in Spain it is generally considered a good idea to insure it, because you are not there to keep an eye on it and problems, although not very common, can occur.
EU Insurance Direct recommends that owners of holiday homes check their existing policy because unoccupancy levels may need to be changed. This is not only due to Brexit (in the case of owners in the UK), but also the current situation with Covid. «Travel Corridors are closed at present and owners do not know when they will be allowed to travel back to Spain. This is generally a simple process so call your insurer to discuss the situation and ask for their advice,» says Wendy.
BMI also point out that an added benefit of home insurance is that the companies in Spain also provide legal assistance and this can be very useful, especially in cases where squatters have moved in, something which has become more frequent in recent times.
«When taking out a household insurance policy, check that the cover includes squatting. It won't ensure that nobody moves into your property illegally, but it is a solution if it happens. You can recover the cost of any damage they cause to the property, or if they steal anything of value,» they say.
Finally, for British residents of Spain who may have been using UK-based insurers, it is a good idea to check whether anything has changed now that the Brexit transition period is over. Your insurer should have advised you if this is the case, but there is still some confusion about the situation and whether any changes may be forthcoming. If you are concerned, or there are changes that affect you in your insurance or life assurance cover, you can rest assured that you do not have to be uninsured. There are plenty of excellent companies in Spain with policies in English and multilingual staff.