Low Cover Levels and A Speckled History of Not Paying Out
There are a small number of local brokers in Javea that offer home, medical and car insurance. For the most part these are reliable representatives of established insurance firms.The insurance market in Spain, however, is not as well developed as in the UK. There are fewer competitors and the levels of cover tend to be much lower than you will have been accustomed to in Britain. Premiums may be a lot less than in the UK, but the insurance industry here is still learning about risk and as these companies have entered the market, many have been caught up in unexpectedly large claims, which they have battled to get out of having to pay.
Nowhere is this more true than with house insurance. The poor workmanship of many builders on the Costa Blanca, has left insurers having to pick up large repair bills and professional indemnity claims. For expatriates that has meant trouble, as there is no Ombudsman service in Spain who will take up your cause when insurers refuse to pay out when they should. Here the only resort when this occurs is is to turn to your solicitor.
As usual, the building trade has been quick to catch on to this. When they are called in to undertake repairs, or put right the poor workmanship of others, the charges to the insurers are inflated. Many local tradesmen will not take on work if payment is going to be undertaken directly from the insurers. Instead, they will insist on being paid directly by the home owner. That leaves the customer in a quandry. If they don't pay for the work direct, the insurer will argue about how much was paid for the work, claiming they could have sourced the job cheaper using alternative trademen. On the other hand, if the customer waits for the insurer, the work may neer get completed.
This example is meant to be helpful and not meant to put you off purchasing a property in Spain. What we hope you will glean is that the Spanish insurance market is vastly different than in the UK and you need to know what you are getting and whom you are dealing with, well before you pay over any premiums to a local salesman. Just one other warning. There have been a number of British rogues who have entered the local market in Spain. These are mainly individuals who claim to sell policies for home, medical, life or travel insurance that is underwritten back in the UK. Many even state on the certificates they provide that cover is 'from certain syndicates at Lloyds of London'. That may well be the case, but we know of at least three occassions where it has NOT been the case. So don't forget common sense. Check it out! A few phone calls to either the Spanish insurer, the Lloyds representative in Spain, or to the company the salesman claims to represent, will in most cases clear up any uncertainty.