An article in Diario de Avisos recently published the findings of a study done on Underinsurance Practises in Spain. The study highlighted the lack of knowledge that over 60% of residents in Spain have about their insurance policies.

"Just 4 and a half years ago, the town of Lorca in Murcia, suffered one of the worst earthquakes in recent memory in Spain. The result was catastrophic: 9 people died, 300 were injured and 1,200 buildings had to be demolished, with economic losses, according to the Insurance Compensation Consortium, amounting to over 450 million Euros. But the misfortune did not end there.

Following the earthquake, many affected were shocked to find out how little compensation they were due from their insurance providers. Their policies did not cover their homes real value. 99% of the time, this is due to insurance companies undervaluing the home in order to beat their competitor's quotes."

Although Lorca is certainly an extreme case, the practise of underinsuring a house or even car or business for that matter is a very common reality. According to the study's underinsurance home in Spain, "How well are our Houses Insured?", housing is secured by 32% below its real value. According to this study, homes are valued at an average amount of 107,000 Euros, while their real value is around 142,000 Euros on average. This means that in case of a serious disaster, like a fire that destroyed the house, the insurance would pay only 107,000 Euros, resulting in a real loss of 35,000 Euros to the property owner.

There also tends to be an undervaluation for Public Liability which covers the repairs for neighbouring properties following a fire or water damage. This means if something was to go wrong, the owner of the property would be liable for the costs incurred for repairs.

A shocking statistic reveals over 80,000 people in the Canary Islands don't even know who they have their house insurance with! AND over 500,000 don't even know what their House Insurance covers! When buying a property, it's common place for the mortgage lender to insist you take out your house insurance with them. However, this cover may not be adequate and will be a very basic policy. You may cancel this policy after 12 months as long as it is cancelled one month prior to renewal date according to Spanish Law.

We urge you to send us a copy of your current House Insurance policy so we can do a health check on it. Please email our professional Insurance Agents info@tibc-sl.com

For your information, we also offer the following insurance products throughout the Canary Islands. Car Insurance, Commercial Insurance, Community Insurance, Medical Insurance, Inheritance Tax Insurance, Pet Insurance, Golf Insurance, Accident Insurance, Life Insurance, Boat Insurance, Hobbby Insurance and more so get in touch with us if you have any questions!

If you would like a quick quote, visit our Quote Request page and fill out an Online Insurance Quote Request Form.