Insurance in Spain for Expats in Madrid: What You Need

Rent-default insurance (seguro de impago) is a different thing. It protects the landlord if the rent isn't paid. When we checked, the rental law said a landlord can't require a tenant to take one out. That wording came from a government decree that was in force but still waiting for a parliamentary vote, so check the current position if a landlord insists. Any extra guarantee on top of the deposit is capped at two months' rent on most long-term home leases.

Your bank, if you take a mortgage

The bank can require two kinds of policy. One is damage insurance on the property. The other is a policy that guarantees the loan gets repaid, typically life insurance. What it can't do is make you buy them from its own insurer. Spanish mortgage law gives the bank three duties here.

• It must accept an alternative policy from any insurer with equivalent cover and conditions, at signing and at each renewal.
• It can't charge you anything for checking that alternative policy.
• It can't worsen any term of the loan because you chose another insurer.

Where it gets tricky is the discount. Banks often take something off the interest rate if you take their home or life policy, or other products. That's called a combined sale, and it's legal. The bank also has to show you the loan without the extras, so you can compare. Do the sums over the whole loan: the rate saving against the premiums you'll pay. If you later move a policy elsewhere, you may lose that discount, so read the conditions first.

The Banco de España's customer guide to mortgage insurance sets out these rules in Spanish. For the rest of what buying costs, from transfer tax to notary fees, see our guide to renting or buying in Madrid.

Your community of owners

If you own a flat, you're also part of the comunidad de propietarios, the owners' association that runs the building. The law lets the community take out building insurance from its reserve fund, but it doesn't oblige it to. Many communities do insure the building and its shared parts, but don't assume. Ask the building's administrator (administrador de fincas) for a copy of the policy. It shows what the building policy already covers, so you don't pay twice for the same walls, and where your own policy has to take over.

What's genuinely optional

Everything else is your call. Here's how we'd think about the common ones.

• Home insurance as a tenant. Optional unless your lease asks for it. It's worth having for the liability cover alone, and for your belongings if they'd be hard to replace.
• Home insurance with no mortgage. Not compulsory. Still sensible, because a fire, a flood or a leak into the flat below can cost far more than you'd want to pay yourself.
• Life insurance. Never required by law. Worth considering if someone depends on your income, or if you share a mortgage with a partner.
• Private health insurance. Optional if you're in the public system. People add it for shorter waits to see specialists and for English-speaking doctors.
• Funeral insurance (seguro de decesos). You'll often be offered this policy, which many Spanish families hold. It's entirely optional, so check it doesn't duplicate cover you already have.
• Pet health insurance. Optional, and separate from the liability cover for dogs above.
• Professional liability insurance. If you work for yourself, clients or your professional body may require it. Ask before you take on the work.

Home insurance, decoded

Spanish home policies come with their own vocabulary. These are the words that matter when you compare quotes.

• Continente is the building: walls, floors, fixed installations and built-in wardrobes. Owners insure it, tenants usually don't.
• Contenido is your belongings: furniture, appliances, clothes and electronics. This is the part tenants mainly need.
• Responsabilidad civil is liability for damage you cause other people, like that leak into the flat below.
• Franquicia is the excess, the first part of each claim that you pay yourself. A higher excess means a lower premium.
• Valor de reposición means the insurer pays what it costs to replace an item new, rather than its worn value. Check which one your policy uses.

Two traps catch people out. The first is underinsurance (infraseguro). If you insure your belongings for less than they're worth, the insurer pays claims in the same proportion, unless the policy waives that rule. Insure half the value and you'll get roughly half of each claim, even a small one.

The second is the fine print. Spanish law says clauses that limit your rights have to be highlighted and specifically accepted in writing. So the clauses in bold that you sign are the ones to read most carefully.

Floods and other natural disasters work differently. Extraordinary events such as floods, earthquakes and very strong winds are paid by the Consorcio de Compensación de Seguros, a public body. Every home policy includes a surcharge that funds it. The catch is that you're only covered if you have a policy in force when it happens. With no home insurance at all, the Consorcio can't pay you. On a brand-new policy, there's also a seven-day wait before this cover applies to natural events, with some exceptions.

Car insurance when you're new in Spain

The compulsory minimum covers injury and damage you cause others, up to legal limits. In practice, most people buy one of these:

• Third party (a terceros). The compulsory part plus extra liability cover, often with legal defence and roadside assistance. Some versions add glass, theft or fire (a terceros ampliado).
• All risks (todo riesgo). Also covers damage to your own car, even when the accident is your fault. It's often sold with an excess (con franquicia) to bring the premium down.

Your claims history has a big say in the price. Before you leave home, ask your insurer there for a certificate of your claims record. How much credit a Spanish insurer gives a record from abroad varies, so ask each one before you buy. Once you're insured here, a Spanish insurer has to give you your claims certificate within 15 working days of asking, which helps when you switch.

The compulsory system also protects you as a victim. If you're hit by an uninsured or unidentified vehicle, the Consorcio de Compensación de Seguros acts as a guarantee fund, within the limits the law sets.

How to buy: insurer, agent, broker or your bank

In Spain you can buy insurance through a few different kinds of seller. They aren't the same, and the law makes each one tell you which it is before you sign.

• Directly from an insurer, online, by phone or in a branch. You deal with its own staff, and you only see that company's products.
• An exclusive agent (agente exclusivo). Works under an agency contract for a single insurer. Often local and personal, but you'll only be offered that insurer's policies.
• A linked agent (agente vinculado). Has agency contracts with several insurers, so there's some choice. They still act on the insurers' behalf.
• A broker (corredor de seguros). Independent of insurers. By law, a broker's advice has to rest on an objective, personalised analysis. A broker acts for you, which is handy at claim time, when you want someone on your side.
• Your bank. When a bank sells insurance, it's acting as an agent (operador de banca-seguros), often for its own group's insurer.

Before you sign, the seller has to tell you whether they act for you or for the insurer, whether they're giving you advice, and how they're paid. Ask for it in writing if it isn't offered. A fee from you and a commission included in the premium are both normal, but you should know which one applies.

When a broker is worth it

A broker makes most sense in these cases.

• You need several policies at once, say home, car and health, and want one person to compare them.
• Your situation is unusual, like a foreign driving record, a pre-existing condition or a flat you rent out.
• You're not confident reading a policy in Spanish.
• You want someone to argue your case if a claim is refused.

If your needs are simple, buying direct or through an agent can be perfectly fine. The point is to know who the person across the table works for.

How to check a broker or agent on the official register

Every agent, broker and bank selling insurance has to be on a public register. Spain's insurance supervisor, the Dirección General de Seguros y Fondos de Pensiones, keeps it, and it's quick to check:

1. Open the supervisor's register of insurance distributors. It's in Spanish only.
2. Type the person's or firm's name under "Nombre / Razón Social", or their registration code (clave de inscripción) if you have it.
3. Look at the class (clase de distribuidor). It tells you whether they're registered as a corredor, an exclusive or linked agent, or a bank operator.
4. If someone calls themselves a broker but shows up as an agent, ask them why.

The same site lets you check that an insurer is authorised, and the supervisor keeps a list of firms that aren't. A contract with an unauthorised firm can be void, so the check is worth it, especially for policies sold online by firms you haven't heard of.

Renewal, cancelling and switching

Most Spanish policies run for a year and then renew themselves automatically. This is where newcomers lose money.

• To stop a renewal, give notice in writing at least one month before the renewal date. Miss it and the policy rolls over for another period.
• The insurer has to give you two months' notice if it wants to change the contract at renewal, or if it doesn't want to renew.
• Cancelling mid-term usually takes effect at the end of the current period, not on the day you ask.
• Use a channel you can prove. A burofax (Correos' service that certifies the content and the delivery), a signed letter with a stamped copy, or the insurer's online form with a receipt. Keep the proof.
• Bought online or by phone? You can usually withdraw within 14 days without giving a reason, or within 30 days for life insurance.

A practical habit: when you take out a policy, put a reminder in your calendar six weeks before the renewal date. That's your moment to compare prices and switch.

If you have a mortgage, the same logic applies to the bank's policies. At each renewal you can move to another insurer with equivalent cover, and the bank has to accept it. Just check the effect on any rate discount first.

Before you sign: checks that save trouble later

• Ask for the policy in English. Under the Insurance Contract Act, the policy is written in one of Spain's official languages, your choice, and in another language if you ask. Ask before you sign, not after a claim.
• Answer the questionnaire honestly. You have to declare what the insurer asks about. An honest mistake can cut what it pays, and a deliberate or seriously careless one can mean it pays nothing.
• Read the bold clauses. Exclusions and limits have to be highlighted and signed, and they're the ones that bite.
• Check the sums insured. Too low, and the proportional rule kicks in.
• Check waiting periods (carencias) on health policies, and the excess on home and car policies.
• Compare the information sheets. For non-life policies you should get a standard product information document in plain language. Put two side by side.

Making a claim, and what to do if it's refused

Tell the insurer within seven days of finding out about the damage, unless your policy gives you longer. Take photos, keep receipts, and don't throw away damaged items until the insurer says you can. Once it has your claim, the insurer has 40 days to pay at least the minimum it may owe, based on what it knows by then. If it pays late, the law adds interest.

If you disagree with a decision, there's a set path.

1. Complain in writing to the insurer's customer service department (servicio de atención al cliente), or its customer ombudsman if it has one. Keep proof that you sent it.
2. If there's no answer after a month, or you're unhappy with the reply, take it to the complaints service of the Dirección General de Seguros. Its office is here in Madrid, at Paseo de la Castellana 44, and you can also file online with a digital certificate.
3. Its decision isn't binding on the insurer, although insurers usually follow it. After that, the courts are the last step.

Common mistakes to avoid

• Assuming your landlord's insurance covers your things. It usually covers the building, not you.
• Letting a policy roll over because the renewal letter was in Spanish and nobody read it.
• Taking every product the bank offers with the mortgage without doing the sums.
• Buying travel insurance for a visa that needs proper health insurance.
• Driving a car you've just bought before its policy is in force.
• Insuring your belongings for a token amount, then getting a token payout.

How Locallista helps

Insurance in Spain mostly happens in Spanish: the quotes, the policy, the renewal letters and the claim forms. That's where someone who speaks your language makes a real difference.

We're a directory of English-speaking local service providers. Every business is screened before it's listed, reviews are phone-verified, and the ranking reflects real expat experience, not who paid the most. It's free to browse and free to get in touch. Our English-speaking insurance agents for Madrid can help you compare home, car, health and life cover. Ask them the questions in this guide, including whether they act as an agent or a broker. If a mortgage or a property purchase is part of the picture, our English-speaking real estate lawyers in Madrid can check the paperwork. And for DGT forms and other admin, our bureaucratic services in Madrid can do the legwork.