Holiday home insurance in Spain: your essential guide

Spain is a popular holiday destination for Brits - not only for its sun kissed beaches along the Costa del Sol, but also for its rich culture and history. Buying property in Spain, be that along the Costa Brava, Tarifa or the Balearic Islands, can be a great investment - especially given that approximately 70% of Spain's population lives in cities, leaving vast swathes of beautiful, unspoiled Spanish countryside.

Whether you're thinking about buying a property in Spain, or already a holiday home owner, you'll need holiday home insurance. That way you can put your feet up and relax, knowing your holiday home is covered in case of the worst.

A standard home insurance policy may not provide adequate cover for a holiday home in Spain, which is why it's generally recommended to opt for a specialist Spanish holiday home insurance policy. In this guide, we will cover everything you need to know about Spanish holiday home insurance. Keep reading to find out more!

Are you looking for holiday home insurance for your Spanish property? At Howden, our team of trusted experts can help you find a policy that’s the perfect fit for you.

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What is Spanish holiday home insurance?

Spanish holiday home insurance covers second properties in Spain that are used as holiday homes. These specialist policies are designed to protect your property against the unique risks and challenges associated with owning property abroad.

What does Spanish holiday home insurance cover?

Like home insurance, there are typically three types of cover available: buildings, contents, or a combined buildings and contents policy.

Spanish holiday home insurance typically includes buildings and contents cover as standard, safeguarding your property against damage and your home's contents from theft, damage or loss. Your Spanish holiday home insurance policy may also include some or all of the extra policies we will detail below.

What cover do I need for my Spanish holiday home?

The type of cover you need depends on how you plan to use your property. It is generally advised to take out buildings and contents insurance as the bare minimum.

If you are getting a mortgage for a holiday home in Spain, Spanish banks require you to have buildings insurance to protect their investment.

What insurance do you need for a holiday let?

A comprehensive Spanish holiday home insurance policy usually includes cover for holiday letting. If you plan to rent out your holiday home in Spain, it is recommended to have public liability, employers' liability, and loss of rental cover (which we will detail below), so you should check with your insurer to see if these are already included in your policy.

Additional cover options that may be included in your policy

There is also a range of additional cover options that your policy may include, or that can be added on to your policy:

Unoccupancy cover

Many home insurance providers require you to reside in the property and typically won’t cover homes left unoccupied for more than 30 days. Empty properties pose higher risks, as they are more vulnerable to theft, vandalism, and other hazards.

Rather than standard home policies, holiday home insurance offers a tailored solution, by accommodating longer vacant periods. These policies generally extend coverage for off-season vacancies, often up to 60 days. They are often subject to specific conditions, such as removing valuables, and exclude loss of metered oil and water.

Loss of rental income

If you rent out your property, and your property becomes damaged due to an insured event, such as fire, flood, or storm damage, loss of rent insurance helps recover lost earnings (e.g. due to booking cancellations)

Alternative accommodation cover

Should your Spanish holiday home become uninhabitable due to damage to the property, this covers alternative accommodation costs, ensuring that you and your family have a place to stay while repairs are carried out.

Alternative accommodation cover is often included in a Spanish holiday home insurance policy, but you should always check your policy documents first.

Public liability cover

While public liability insurance is not a legal requirement for holiday homeowners in Spain, if you plan to rent out your property to paying guests it is highly recommended.

This type of insurance provides cover in case a guest or other third parties suffer an injury or their property is damaged while staying at your holiday home.

It's worth considering the level of public liability cover you need, factoring in the number of guests you plan to accommodate and the type of activities they will be engaging in.

Employers' liability cover

Employers' liability insurance provides cover for anyone you employ (such as domestic staff or contractors) to maintain your holiday property in Spain.

If an employee becomes ill or injured while working at your Spanish property, employers' liability cover gives you financial protection, covering associated expenses such as medical or legal fees.

Emergency travel costs cover

This covers the travel costs in case Spanish property owners need to travel to their holiday home in the event of an unexpected emergency. This could be anything from water damage from a burst pipe, a fire on your property, or damage to your holiday home from a storm.

Legal cover

Holiday home legal insurance provides cover in the event of a legal dispute related to your holiday home in Spain. This could include:

• Contract - If you have a dispute about:

• • Buying or renting out your holiday home for leisure purposes,
  • buying or hiring,
  • your tenancy or a lease where you are a tenant or lessee.

• Property - Against another party who causes damage to your holiday home, nuisance or trespass.

• Tax - To have help from an accountant if HMRC investigate your personal tax affairs.

• Legal defence - For the cost of legal representation if you are investigated for or charged with an incident arising out of the letting out of your holiday home.

Swimming pool cover

Provides compensation for loss of use of your swimming pool due to damage. This may already be included in your holiday home buildings insurance policy, so it's always worth checking with your insurer first.

Is home insurance mandatory in Spain?

While home insurance is not legally required for Spanish holiday properties, it's certainly worth having. However, as we mentioned above, if you plan on taking out a mortgage for a holiday home in Spain, Spanish banks require buildings insurance to safeguard their investment.

Is holiday home insurance more expensive?

Insuring a holiday home in Spain can be more expensive than insuring a property in the UK, for example, due to additional risks.

Insurers calculate Spanish holiday home insurance premiums based on a number of factors, including:

• The property's location
• Property type and size
• Rebuild value
• Security of your property
• The value of your contents
• Claims history
• The risk of loss or damage

Generally speaking, higher-risk properties tend to have higher insurance premiums.

What type of insurance do you need for Airbnb rentals in Spain?

Airbnb provides hosts with Host Protection Insurance, offering up to $1 million per rental for liability coverage, including potential protection for landlords, subject to specific terms and conditions.

Additionally, Airbnb offers a free Host Guarantee, covering guests' damage to the host’s property for up to $1 million. However, this is not an insurance policy, and Airbnb clarifies that it does not replace homeowners or renters’ insurance. Find out more here.

Since coverage is not comprehensive, it's wise to get holiday home insurance that specifically includes Airbnb rentals to ensure proper protection for your holiday home.

Here are five ways to reduce the cost of your Spanish holiday home insurance

If you're looking to save money on your holiday home insurance, rest assured there are still ways to make it cheaper! Here are a few ideas:

Regular upkeep

Keeping your property in good condition will help prevent deterioration and shield it from weather-related damage. This way, you'll be less likely to make a claim on your insurance, keeping your premiums down.

Improve security

Simple measures like installing a burglar alarm, secure locks and security cameras will discourage thieves and could reduce your premiums.

Increase your excess

Opting for a higher excess can lower your premium, but ensure it's an amount you can comfortably cover if needed.

Choose a single insurance provider

Using one insurer for both your buildings and contents insurance can often be cheaper than taking out multiple policies with different insurers.

Use annual payments

Paying your premium in one yearly instalment is usually more economical than monthly payments.

Holiday home insurance Spain: key takeaways

• If you're insuring a property in Spain, Spanish holiday home insurance is highly recommended, taking into account the unique risks and challenges associated with owning a holiday home overseas.
• There are many specialist insurance providers with dedicated teams experienced in insuring properties in Spain. Remember to do your research and find the right cover for your dream home!
• It’s important to consider the level of cover you need, including the value of your property, its contents, and any additional features such as swimming pools or domestic staff.
• Buildings and contents insurance are essential components of any holiday home insurance policy, providing cover for damage (such as from storm damage or theft) to the Spanish property and its contents.
• If you plan to rent out your property, public liability insurance is strongly recommended, protecting you against claims from guests or third parties in case of an accident.
• Employers' liability is also advised for holiday home rental owners, covering you for any expenses related to accidents incurred to employees at your property.
• Other types of insurance cover to consider include emergency travel costs cover, loss of rent cover, and alternative accommodation insurance, all of which can provide financial protection for your holiday home in case of unforeseen events.
• Insuring an overseas property, such as in Spain, is typically more expensive than in the UK due to the associated risks.
• You can save money on your Spanish holiday home insurance in several ways, such as regular upkeep, improving security, increasing your excess and using a single insurer.