Is home insurance obligatory? What happens if I don’t have any?

A common question among homeowners and tenants is whether home insurance is mandatory and what the consequences might be for not having it. The answer is not as simple as a resounding yes or no, as it depends on the situation. Below, we explain when insurance is required and the potential consequences of not having it.

What does home insurance cover?

Home insurance is primarily designed to protect both the home and its occupants from a wide range of risks that could cause property damage or financial loss. Nowadays, these insurance policies offer protection against a wide range of events, including fire, water damage, theft, broken glass and natural phenomena, among others. Furthermore, it can include civil liability coverage, protecting the insured against damages they may accidentally cause to third parties or their property. In this way, home insurance offers peace of mind and financial security against unforeseen events, sparing the homeowner or tenant from having to take on costly repairs or pay out compensation alone.

According to UNESPA data, in 2024, around 98% of homes in Spain were covered by some form of home insurance, highlighting the value people place on protecting their property. However, not all coverages are mandatory, nor do all cases require the same protection.

Is home insurance obligatory?

Spanish legislation establishes a specific obligation for certain situations along with specific coverage requirements. Therefore, Article 10 of Royal Decree 716/2009, of 24 April, developing certain aspects of Act 2/1981 on regulating the mortgage market, sets forth that assets on which there is a mortgage guarantee must have insurance for damages, covering at least the following items:

• Fire damage to the property.
• Other damage: for example, hail or freezing weather.

In accordance with the applicable regulations, specifically Article 10 of Royal Decree 716/2009, the insured amount must match the appraised value of the insured asset, excluding assets that are inherently uninsurable, particularly the land. However, in accordance with the first additional provision of Order ECO/805/2003, the insured amount must not be lower than the amount resulting from subtracting the value of the land on which it is located from the gross replacement value of the building or building element being valued. 

Broadly speaking, the bank that grants the mortgage offers its own home insurance and must also allow the customer to contract insurance with another company, provided that it meets the minimum requirements established by law.

If I take out home insurance through my financial institution along with a mortgage, can I cancel the insurance provided by the bank issuing the mortgage?

In accordance with current regulations, financial institutions cannot make customers take out insurance with them, although they may require customers to maintain the minimum mandatory coverage outlined above.

The customer has the right to:

• Take out insurance with the company of their choosing.
• Change insurance companies during the term of the mortgage.
• Request the cancellation of the insurance initially taken out with the bank.

There is an obligation to have insurance and to notify the insurer with regard to the existence of the mortgage loan, after which the insurer will inform the lender.

What happens if I don’t have home insurance?

Failing to have home insurance can have serious financial and legal consequences:

• Breach of contractual obligations: if you have a mortgage and fail to maintain the obligatory insurance, you would be violating the terms of the loan agreement, which could result in penalties or even early termination of the mortgage.
• Unlimited civil liability: if you cause damage to third parties (for example, water damage to neighbours), you would be responsible for paying out all compensation, which could be substantial.
• Total loss of assets: in the event of theft, fire or other disasters, you would be responsible for covering the full cost of repairing or replacing the damaged property.

• Alternative accommodation costs: if your home becomes uninhabitable, you would need to pay for temporary accommodation yourself while repairs are being carried out.

   

What coverage do home insurance policies offer?

There are two types of SegurCaixa home insurance: SegurCaixa Home Insurance and SegurCaixa Comprehensive Home Insurance which offers comprehensive protection above and beyond the basic mandatory coverage. Some of the main coverages are:

• Building damage: such as protection against fire, explosion, water damage, atmospheric phenomena, vandalism and other risks that may affect the home. The level of protection and coverage depends on the type of home insurance you choose. 
• Content damage: refers to coverage for furniture, appliances, clothing, personal items and other property inside the home. The value of the contents to be insured must be decided by the insured.
• Family civil liability: coverage for damages caused to third parties by family members or pets, including water damage to neighbours or accidents at home. The maximum amount is determined depending on the chosen option.
• Robbery and/or theft: coverage for stolen items and money, both inside and outside the home, as well as for any damage caused during the theft.
• Maintenance service for minor repairs: check which repairs are covered and the maximum amount covered.

• Professional services: access to tradespeople, such as locksmiths, available 24/7.

   

FAQs

What happens if my neighbour doesn’t have home insurance?

If a neighbour causes damage to your home (such as from water leaks) and doesn’t have home insurance, your policy may initially cover the repairs as part of your claim. The claim against the neighbour is handled automatically through the claims process, with the insurance company authorised to manage the compensation collection process. Legal protection, on the other hand, is an optional coverage that provides legal advice and support in pursuing compensation through the courts when needed.

Is home insurance for tenants obligatory?

Tenants are generally not legally required to have home insurance; the obligation lies with the property owner, particularly if a mortgage has been taken out on the property. However, many rental agreements include clauses that oblige tenants to take out liability insurance or even comprehensive home insurance. We recommend carefully reviewing the lease agreement.

What insurance does a tenant require?

Although not mandatory, tenants are encouraged to take out home insurance covering property damage (structure and/or contents) as well as associated civil liability. In practice, current policies include civil liability coverage based on ownership, use, and insured capital, providing protection against potential damage to third parties, such as water leaks affecting neighbouring properties. It is also advisable to include coverage for personal belongings (such as furniture, appliances, and clothing) in the event of theft, fire or other unforeseen events; SegurCaixa Adeslas insurance provides coverage for these situations.