Rental Insurance for Landlords and Tenants In Spain
Rental Insurance for Landlords and Tenants In Spain
Rent insurance is taken out through an insurance company and not only covers damage to the property or caused by tenants, but also protects you against the risk of non-payment of rent.
Who needs rental insurance in Spain
Rental insurance is an essential safeguard for both landlords and tenants, providing an additional layer of protection and security. Landlords may choose to require rental insurance as a safety measure to protect their property from potential damage or loss, ensuring their investment and mitigating financial risks. On the other hand, tenants also benefit from rental insurance as it protects their personal belongings and liability.
In general, anyone who rents a property in Spain, whether residential or commercial, may consider the need for rental insurance. This applies to landlords who wish to protect their assets, as well as tenants who want to insure their belongings and liability. From university students renting a flat to families renting a house, having rental insurance in Spain offers peace of mind and financial security in the event of unexpected incidents such as fires, theft, property damage, or liability claims due to accidents.
For expatriates with property in Spain intended for rental, rental insurance can be an invaluable safeguard to protect both your property and belongings in the event of unexpected situations.
Special coverage included in rental insurance
- Damage to the property
This coverage provides protection against vandalism by the tenants themselves, such as deterioration of furniture or theft of items within the property. A maximum amount is generally applied, and compensation is calculated when the tenant is evicted. - Loss of rent
If the property suffers damage and cannot be rented for a period, this coverage provides compensation for the financial losses. Each insurer has its own formula and may compensate for the entire period the property is vacant or set a time limit, usually up to a year from the incident. It can also set a limit on the insured amount or indemnify a percentage of the losses. - Legal defence
This guarantee covers the legal defence of the landlord, meaning you will receive legal assistance and may claim for damages caused by the tenant or non-payment of rent. However, it’s important to note that this guarantee does not apply to eviction cases. - Non-payment protection
Last year, contracts for rental non-payment insurance increased by 25%, which is not surprising considering that half of the Spaniards renting out their properties do so out of economic necessity but are not keen on the idea of someone living in their house. This optional coverage provides compensation if the tenant fails to pay rent, usually for the last twelve months.
Generali Expatriates also offers landlords a special coverage: Legal Defence cover in case of illegal occupation. This coverage provides protection for landlords in the unfortunate event that their property is illegally occupied. Learn more about how this coverage works and how it can protect your property in Spain by visiting our Essential Guide to Squatting in Spain.
In addition to the peace of mind it provides, rental insurance in Spain also offers tax advantages as you can deduct 100% of it from your income tax return. However, the Spanish Rental Insurance Observatory warns of the proliferation of unregulated rental non-payment insurances that provide no protection. Therefore, they recommend taking out these policies directly with insurance companies or through authorised brokers.
Common myths about rental insurance debunked
There are several common myths about rental insurance that may lead to misunderstandings or confusion among tenants. It is important to debunk these myths so tenants can better understand the importance and scope of rental insurance. Here are some of the most common myths and their clarifications:
- The landlord’s insurance covers all eventualities for the tenant
This is one of the most widespread myths. While it is true that the landlord may have insurance for the building or structure, this insurance generally does not cover the tenant’s personal belongings or liability. Therefore, tenants need to get their own rental insurance to protect their interests. If you're a tenant in Spain, we recommend securing your own content insurance, as it will not be covered under the landlord’s policy. - Rental insurance is expensive and not worth it
Many people underestimate the value of rental insurance because they perceive it as costly. However, the cost of rental insurance is generally much lower compared to landlord insurance and can provide invaluable coverage in the event of loss of personal belongings, liability, and other unforeseen events. - I don’t need rental insurance if I have a rental contract
While the rental contract sets certain terms and responsibilities between the landlord and the tenant, it does not offer financial protection in the event of the loss of personal belongings or liability. Rental insurance is necessary to cover these aspects and provide greater security for the tenant.
Frequently asked questions about Rental Insurance in Spain
Why do I need rental insurance if the landlord already has insurance?
Although the landlord may have insurance for the property itself, this insurance generally does not cover the tenant’s personal belongings or liability. Therefore, tenants need rental insurance to protect their own interests.
What happens if my rental property suffers damage that is not covered by the landlord’s insurance?
If the damage to the rental property is not covered by the landlord’s insurance, the tenant’s rental insurance may provide an additional layer of protection. This can include coverage for personal belongings, temporary accommodation costs, and more, depending on the policy terms.
What happens if my tenant causes damage to the property?
If you are the landlord of a rental property and your tenant causes damage to the property, you may be able to file a claim through your landlord’s insurance or the tenant may file a claim through their rental insurance, depending on the details of the incident and the coverages of the policies involved. It is advisable to consult with your insurance agent for specific guidance in this situation.
Home insurance can cover many unexpected events, but if you're a property owner looking to rent out your home or living in a rental property in Spain, you need to make sure you understand the best options available to you.
At Generali Expatriates, we understand that each customer's needs are unique and we offer optional cover to ensure that your home insurance policy is perfectly tailored to your needs. Whether it's your holiday home, your permanent residence in Spain or even if you rent it out as a holiday home, with Generali you only pay for what you really need.
Over 200 dedicated Expat brokers and agents are ready to help you find the perfect insurance plan for your needs. Find your nearest broker or agent here or simply request a quote now and we will be in touch shortly.
We're here to help and make sure your property and belongings are well protected while you enjoy life in Spain.