When you take out an insurance policy, one of the most important aspects, which will determine how much will be paid out in the event of loss or damage, is the valuation criteria for the damaged material assets. There are two fundamental concepts: the new-for-old replacement value and the actual value.

It is on the basis of these that you may either receive compensation that will allow you to fully replace the damaged asset for a new one, or you may only receive the value dependant upon its age and condition. Understanding this distinction is essential so that you know what protection your insurance policy provides and avoid any potential surprises.

Below, we explain what the actual value is, what the new-for-old replacement value means, when each is applied, and how this difference can have a significant impact on the compensation you receive in the event of loss or damage.

What is the actual value?

The actual value, also known as the market value, is the amount that the insured asset would have just before the loss or damage took place, taking into consideration its state of repair, age, condition and accumulated depreciation.

To determine this, the following aspects are taken into consideration: time since purchase, condition, estimated lifespan, annual depreciation and remaining life, and price in the second-hand market. This methodology is contained in Article 26 of the Insurance Act.

The actual value applies by default in most standard policies when new-for-old replacement value coverage has not been specifically taken out. It is common in:

• Basic insurance where the premium is lower
• Assets that are several years old
• When the policy does not expressly include the new-for-old replacement value
• Items that have exceeded a percentage of their lifespan (normally 50%)

Imagine that you take out home insurance and your television set, which you purchased six years ago for €1,500, is damaged in a fire.

If your policy pays out the actual value:

• Original purchase value: €1,500
• Age: 6 years
• Estimated lifespan: 10 years
• Depreciation: 60%
• Actual value: €600

The payout will be calculated at €600, which is what your television set would be worth in the second-hand market. With that amount, it is unlikely that you would be able to buy a new, like-for-like television set.

What is the new-for-old replacement value?

The new-for-old replacement value, also known as the replacement value, is the compensation criteria that enables you to receive the amount needed to buy a new asset that is equivalent to the one that was lost or damaged, without applying depreciation due to age or use.

The concept of replacement value involves compensating the insured party with the amount needed to completely replace the damaged asset for a new one that is like it. The replacement is the current market cost of a new, like-for-like product.

Main features of new-for-old replacement insurance:

• Compensation according to the current market price of a new, like-for-like asset
• Depreciation is not applied
• It may have time limits 
• Specific conditions depending on the type of object and the purpose of the property (main or secondary residence).

Replacement value in insurance only applies when it has been expressly taken out. Normally in:

• Home insurance with premium coverage that includes this guarantee
• Assets purchased within a fixed number of years previously (between 5 and 10 years)
• When the asset was in good condition before the loss or damage

Returning to the example of the television set, with a new-for-old replacement value, its value would be:

• Original purchase value 6 years ago: €1,500
• Current value of the new, like-for-like model: €1,400
• Applied depreciation: 0%

In the event of loss or damage, you would receive €1,400, the cost to replace your television set with a new one. There is a significant difference between the two: with the actual value, you would receive €600, whereas with the new-for-old replacement value, you receive €1,400.

When is each value applied in the event of loss or damage?

The application of the actual value or the new-for-old replacement value depends on the conditions of the policy, the characteristics of the asset and the limits established by the insurer.

The actual value is applied by default with:

• Simple policies with lower premiums
• Older assets that are above the threshold (5-10 years, depending on what is stipulated in the policy)
• No specific coverage for new-for-old replacement
• Faulty condition of the asset due to lack of maintenance

For the new-for-old replacement value to be applied, the following conditions need to be met:

• Expressly named in the policy: it must appear in your policy’s set of conditions.
• Age limits: depending on the type of asset and the purpose of the property (for example, for furnishings in second homes, the limit is often 5 years).
• Proper condition: the asset needs to be functional and not be damaged before the loss or damage.
• Effective replacement: the payout is directed towards replacing the item for a new one that is like it.

Items excluded from new-for-old replacement (paid at the actual value):

• Clothing and sound and vision devices in second homes that are more than 5 years old (or 2 years old for clothing).
• Moulds, etching plates, designs and goods.
• Items that are unusable or that do not work.
• Valuable items: Gems, jewels, precious stones, works of art and collections (these assets do not depreciate with use, which is why they are treated differently).

To access new-for-old replacement insurance, you need:

• To accurately declare values and ages to calculate the replacement value.
• To regularly update the policy.
• To retain documentation (receipts and purchase dates).

Consequences for the insured party

The difference between the two different policies carries significant financial implications.

If the actual value applies

• Cost gap. The payout will not be enough to buy a new, like-for-like asset. You will need to contribute the difference between the depreciated value and the cost to replace the new item.
• Loss of purchasing power. With items that are several years old, the actual value may be barely 30-40% of the replacement cost, requiring you to make an additional contribution or make do with lower-quality alternatives.
• Limited options. You will only be able to purchase a similar second-hand item, a lower-quality new product or make a significant additional contribution.
• Impact on quality of life. In many incidents of loss or damage, applying the actual value may result in a significant deterioration in your quality of life.

For example, if there is a fire, an actual value family could receive €15,000 for the movable assets when the cost to replace them with new items would be €40,000, requiring them to seek additional financing.

If new-for-old replacement applies

• Full replacement. You receive compensation that allows you to purchase a new, like-for-like item without needing to pay out of pocket.
• Real financial protection. The insurance fulfils its essential function by returning you to where you were before your loss of assets.
• Peace of mind. You know that any item covered by the policy will be replaced in full.
• Technology upgrade. New items often incorporate technological improvements and increased efficiency.
• Maintained quality of life. Particularly important where the loss or damage is complete.

A family with a home insurance policy that includes new-for-old replacement value would receive the €40,000 needed to replace their moveable assets in full.

What are the average clause and the tolerance rule in insurance?

When you take out insurance, it is essential that you declare the correct value of the insured assets and all the relevant risk circumstances. However, what happens when there is a discrepancy between what was declared and the reality? This is where two fundamental legal mechanisms come into play: the average clause in insurance and the tolerance rule in insurance.

Both rules are contained in Spanish insurance legislation and have a direct impact on the compensation you will receive in the event of an accident or loss. 

Understanding these rules is essential. In this article, we delve into what these are, when they apply, how they work and why it is so important to declare the correct values in your insurance contract.

What is the average clause?

The average clause in insurance is a legal mechanism that proportionally reduces the compensation paid out when the insured value is lower than the actual value of the insured item. This clause is governed by article 12 of Law 50/1989 on Insurance Contracts and it aims to ensure a balance between the premium paid and the actual risk covered.

The average clause applies in the event of the following circumstances:

1. The insurance holder has declared a value of the insured asset that is lower than its actual value at the time of the accident or loss.
2. This undervaluation was not deliberate and was not made in bad faith by the insured party.
3. In the event of an accident or loss, the insurer finds a difference between the declared value and the actual value.

In SegurCaixa Adeslas home insurance policies, there are two cases where underinsurance does not apply when the insured sums are lower than the insured assets:

• When the capital recommended by the company was insured, even if it is less than the actual value of the assets.

• When this difference is less than 15%.

• When the accident or loss entails a cost that is less than that indicated in the particular conditions for non-application: €4,500 in SegurCaixa Full Home, SegurCaixa Premium Home and MyBox Home, or €2,500 in SegurCaixa Home

Mathematical equation

To calculate the compensation paid out when the average clause is applied, insurers use the following mathematical equation:

Compensation = (Insured sum / Actual value of the asset) × Damage amount

This equation means that the compensation will be proportionally reduced in the same proportion as between the asset’s declared value and its actual value.

Practical example

Let’s imagine you have a home insurance policy and you have insured the contents of your home for 30,000 euros. However, when there is a fire, the insurer finds that the actual value of the insured item (the entire contents of the home) is actually 60,000 euros.

If the fire caused damage in the amount of 20,000 euros, the compensation will be calculated as follows:

• Insured value: €30,000
• Actual value: €60,000
• Actual damage: €20,000
• Compensation = (30,000 / 60,000) × 20,000 = €10,000

As you can see, even though the actual damage amounts to 20,000 euros, you will only receive 10,000 euros of compensation because the insured sum only represents 50% of the actual value. The compensation has been proportionally reduced in the same proportion.

There is another concept known as the principle of indemnity: If one of the items is overinsured, this can compensate for the “excess” premium of the other item if it is underinsured.

This principle can also be applied to car insurance, where declaring the incorrect value of the vehicle can result in a proportionally lower compensation payout in the event of a total loss.

What is the tolerance rule?

The tolerance rule in insurance is a principle that adjusts the compensation paid out when the premium paid does not accurately reflect the actual risk, as a result of incomplete information or changes that were not declared in the questionnaire or insurance simulation.

It applies, for example, if:

• The home has undeclared special materials or construction (e.g., wood).
• The insured square meterage is less than the actual area.
• There are other risk conditions not correctly reflected in the initial declaration.

In these cases, the insurer proportionally reduces the compensation to compensate for the difference between the premium paid and the premium that would be correct according to the actual risk, ensuring that the coverage and the payment are proportional to the risk assumed.

Practical example

Let’s imagine that you insure your home, stating that it is 120 m² and of standard construction, but the insurer discovers that in reality it is 150 m² and part of the home is built with wood. The premium that you paid was lower than what the actual risk would entail.

If the damages amount to €50,000, the insurer will apply the tolerance rule and adjust the compensation in proportion to the difference in risk. This enables you to:

• Avoid excessive penalties for unintentional mistakes.
• Ensure that the compensation reflects the actual risk assumed.

Comparison: average clause against tolerance rule

Even though both clauses relate to the correct valuation of the insured assets, there are fundamental differences between the average clause in insurance and the tolerance rule in insurance. Grasping these differences is essential to understanding how your policy will work in the event of a loss or accident.

• Application threshold: The most important difference lies in the undervaluation percentage. The tolerance rule in insurance applies when the difference between the insured value and the actual value is no higher than 10% (or the percentage established in the policy’s actual conditions). The average clause automatically applies when it is above this threshold.
• Impact on compensation: Under the tolerance rule, the insured party receives full compensation for the damage suffered, with no reduction of any kind, as long as it does not exceed the insured sum. However, when the average clause applies, the compensation is reduced proportionally according to the mathematical equation shown above, when can entail a significant financial loss to the insured party.
• Insured party protection: The tolerance rule acts as a protection measure for insured parties acting in good faith that have made small valuation errors or whose assets have slightly changed in value. The average clause, on the other hand, is a direct consequence of more significant undervaluations, with a strict mathematical adjustment applied.

When are these rules applied?

It is neither the insured party nor the insurer who decides on which clause applies. Instead, this is defined according to the objective criteria established in Law 50/1989 on Insurance Contracts:

• Tolerance rule: This is automatically used when the undervaluation is less than 10%, when the insured party has not acted in bad faith and when they have complied with their duty of good faith by taking out a policy.
• Average clause: This applies with the undervaluation exceeds 10% of the actual value of the asset, provided the insured party has not acted in bad faith. If there is aggravation of risk or deliberate bad faith, the consequences may be even more serious, with the insurer potentially refusing to pay out compensation.

In both cases, the actual value of the item is determined at the time of the accident or loss, not when the policy is taken out. This means that the insured parties must regularly update the insured sums to reflect the market reality and the actual condition of their assets.

Although the law establishes these mechanisms, article 12 specifies that the parties may agree to rule out or amend the application of these rules. However, in practice, standard contracts for individuals retain these legal criteria with no significant modifications.

These rules work in the same way for both home insurance and car insurance. What matters is the proportional difference between the declared value and the actual value, regardless of the type of asset insured.

Importance of these clauses for the insured party

Understanding the average clause in insurance and the tolerance rule in insurance is essential for many reasons that have a direct impact on your financial protection:

• It avoids unexpected financial loss. Knowing these clauses enables you to understand that a significant undervaluation can lead to a compensation payout that is much lower than the actual damage suffered. 
• It encourages accurate and up-to-date declarations. Knowing that the average clause exists motivates insured parties to declare realistic values and to regularly check the insured sums. 
• It protects insured parties acting in good faith. The tolerance rule in insurance recognises that small mistakes or minor changes in the valuation are normal and should not seriously penalise those who act honestly. 
• It guarantees contractual balance. These clauses ensure that there is proportionality between the premium paid and the risk covered. If you pay a premium calculated on 30,000 euros, but the actual risk is 60,000 euros, it is unfair to expect full coverage. 
• It prevents fraud and bad faith. By establishing clear consequences for significant undervaluations, these clauses dissuade fraudulent acts such as trying to pay lower premiums by declaring incorrectly low values. 
• It facilitates conflict resolution. Having objective and mathematical criteria established by law (such as the mathematical equation of the average clause) reduces disputes between insured parties and insurers in the event of an accident or loss. 
• It makes it possible to make informed decisions. Knowing these clauses helps you to assess whether the insured sums in your policy are adequate and whether you need to adjust them.
• It minimises unpleasant surprises. Many insured parties discover these clauses only when they suffer an accident or loss and receive a compensation payout that is lower than expected. Knowing about these in advance enables you to act preventatively, adjusting the insured sums.

FAQs

What is underinsurance?

Underinsurance occurs when the insured value is lower than the actual value of the asset at the time of the accident or loss. It is this state that activates the application of the average clause in insurance or the tolerance rule in insurance, depending on the degree of undervaluation.

Underinsurance can occur for different reasons: an initial incorrect valuation when taking out a policy, not updating the insured sums over time, improvements made to the property that increase its value, inflation that increased the cost of replacement, or simply not knowing the true market value of the assets.

To avoid underinsurance, it is essential that you make realistic, professional valuations of your assets, annually review the insured sums and update them as necessary, consider all the elements that comprise the total value (e.g., in homes: structure, installations, contents and improvements), and seek advice from professionals or assessors when you are unsure about the actual value. 

Does the average clause always apply?

No, the average clause does not apply in every case of undervaluation. There are several scenarios when it will not apply:

• When the tolerance rule applies.
• When the parties rule it out: according to article 12 of Law 50/1989 on Insurance Contracts, the parties can mutually agree to rule out the application of this clause in the contract. 
• Agreed value insurance: in some insurance policies, particularly for old vehicles or works of art, the parties decide on an “agreed value” from the outset. In these cases, that agreed value is what will be paid out without applying the average clause, irrespective of the actual market value at the time of the accident or loss.
• When the party has acted in bad faith.
• Minor partial accidents or losses. In some contracts, for very small losses, the insurers may opt not to apply the average clause for practical reasons and for customer relations, although technically they could do so.

Can I avoid the average clause being applied?

Yes, there are several strategies for avoiding the average clause in your insurance contract being applied:

• Declare correct, realistic values: The most effective way of avoiding the average clause is to insure your assets for their actual value. 
• Regularly update the insured sums: Review your policy annually and update the insured sums to reflect changes in the value of the assets. 
• Take out insurance policies with a replacement value: Some insurance policies, especially for home insurance, offer a “rebuild value” option, where the insurer undertakes to replace the asset for a new equivalent, regardless of the age or depreciation. 
• Negotiate special clauses: In high-value policies or business insurance policies, you can negotiate the inclusion of clauses that rule out or limit the application of the average clause with the insurer. 
• Take out insurance at an agreed value: For certain assets such as classic cars, works of art or jewellery, consider taking out policies where the value of the asset is agreed in advance. In these cases, that agreed value is what will be paid out with no argument as to the actual value and no application of the average clause.
• Stay within the tolerance margin: Make sure your valuations are accurate enough so that any minor deviation from the actual value falls within the 10% margin, thereby activating the tolerance rule in insurance instead of the average clause.
• Document the value of the assets: Keep invoices, valuations, photographs and any documentation that supports the declared value. This demonstrates your good faith and can help you negotiate with the insurer in the event of an accident or loss, especially if there are discrepancies as to the actual value of the asset.

What is multi-risk insurance and what does it cover?

When it comes to protecting our home, business or community, multi-risk insurance is often the most practical and cost-effective option. This type of policy combines multiple coverages into a single contract, which, if taken out separately, would be more expensive and more complicated to manage. But what exactly is multi-risk insurance?

It is a single policy that combines various protections to cover different risks associated with an asset or activity. Rather than taking out specific fire, theft and civil liability policies, multi-risk insurance combines all these coverages, and more, into a single product. This comprehensive solution provides complete protection, streamlines management, and is typically more cost-effective than purchasing separate policies.

This article gives an in-depth explanation of the types of multi-risk insurance there are, what coverages they include and why having multi-risk insurance could be the best decision to protect what matters most to you.

What does multi-risk insurance entail?

As discussed, a multi-risk insurance policy combines several types of coverage into a single contract, providing protection against a wide range of potential risks.

It works similarly to any other insurance policy. When taking out a multi-risk insurance policy, the insured enters into a contract that details all included coverages, exclusions, compensation limits and the general terms and conditions. In return for paying a recurring premium, the insurer agrees to respond should an event arise by providing financial compensation or repair and assistance services.

The main advantage is that all coverages are managed under a single legal and administrative framework, streamlining incident management and preventing disputes between different insurers.

Types of multi-risk insurance

Multi-risk insurance policies can be personalised to suit the specific needs of the asset or activity you want to protect. Below, we explain the main types of multi-risk insurance available on the market.

Multi-risk home insurance

Multi-risk home insurance is the most widely recognised and commonly held policy among individuals. This multi-risk policy is designed to protect both the building (the property’s structure) and its contents (furniture, appliances and personal belongings) against a variety of risks.

What does it cover?

A typical multi-risk home insurance policy includes coverages such as:

• Fires, explosions and other fire-related damage
• Water damage caused by burst pipes, leaks or flooding
• Robbery and theft inside the home
• Atmospheric phenomena such as storms, hail or wind
• Family civil liability coverage protects against damages that members of the household may cause to third parties
• Electrical damage to household appliances and devices
• Broken glass, toilets and mirrors
• Aesthetic damage to the home
• Home assistance in emergencies

For instance, if a pipe in your kitchen bursts during the night, it could cause water damage to the floor, your furniture and your downstairs neighbour’s home. With a multi-risk home insurance policy, the insurer would cover home repairs, replacing damaged furniture and any damage caused to your neighbour’s property through civil liability coverage.

Multi-risk insurance for companies

Multi-risk business insurance, also called multi-risk commercial or business insurance, is designed to protect a business and its operations against a wide range of potential risks.

What does it cover?

This type of insurance includes protections such as:

• Damage to the premises, equipment, machinery and inventory
• Fire, explosion and smoke damage insurance
• Robbery and break-in at the establishment
• General and operating civil liability
• Loss of profits due to business interruption caused by an accident
• Breakdown of machinery and electronic equipment
• Electrical damage that affects the business activity
• Protection of signs and glass
• Legal defence

For example, if a kitchen fire breaks out in a restaurant that requires it to close for two months for repairs. Multi-risk business insurance covers not only physical damage to premises and equipment but also the loss of profits while it is closed, helping the owner continue paying salaries and other fixed expenses while the business is unable to operate.

Multi-risk insurance in communities

This insurance is specifically intended to protect the communal areas of buildings and residential complexes. The policy is typically taken out by the community of owners to protect the shared areas of the property.

What does it cover?

A multi-risk insurance policy for communities typically includes:

• Material damage to communal areas (entrance, stairs, elevator, gardens, swimming pool)
• Fires and explosions in communal areas
• Water damage to communal areas
• Civil liability of the community towards third parties
• Elevator accidents
• Aesthetic damage to façades and communal areas
• Broken glass and windows in communal areas
• Legal defence of the community

In this case, if a delivery driver slips in the building's entrance due to a loose tile, suffers an injury, and files a claim against the homeowners’ association. With multi-risk community insurance, civil liability coverage handles medical expenses and any potential compensation, so residents don’t have to pay these costs out of their own pockets.

Other multi-risks

As well as those mentioned, there are other types of multi-risk insurance adapted to specific needs:

• Multi-risk agricultural insurance: protects crop and livestock farms against climate events, fires, machinery theft and other sector-specific risks.
• Industrial multi-risk insurance: aimed at large industries and factories, covers heavy machinery, production processes, loss of profits and risks specific to industrial operations.
• Multi-risk insurance for tourist rentals: tailored to holiday homes and includes specialised coverage such as damage caused by guests, civil liability before tourists and protection of the property’s contents.
• Multi-risk insurance for offices and professional practices: specific for professional activities and covers computer equipment, important documents, professional civil liability and data loss.

Main multi-risk insurance coverages

While the exact coverages depend on the type of multi-risk policy, several protections are frequently included in most multi-risk policies:

• Fires, explosion and smoke. It covers material damage caused by fire, explosion, implosion and smoke resulting from these events. It is one of the fundamental coverages of any fire insurance integrated into a multi-risk policy. It also includes damage from lightning strikes.
• Water damages. It provides protection against damage from pipe bursts, leaks, overflows, seepage, and, in some cases, flooding. This coverage is particularly important, as water damage is among the most common causes of claims in both homes and businesses.
• Robbery and theft. It provides compensation for the theft of insured property following forced or violent entry. Some insurance policies also provide coverage for theft of personal belongings outside the insured home or premises, subject to certain limits.
• Civil Liability. A fundamental part of any multi-risk insurance, it covers accidental damage the insured may cause to third parties or their property. Civil liability coverage safeguards against financial claims that could seriously affect family or business assets.
• Electrical damages. Protects electrical and electronic equipment against damage from overvoltage, short circuits or power fluctuations. Electrical damage can impact everything from household appliances to computers and air conditioning systems.
• Atmospheric phenomena. It provides coverage for damage caused by wind, rain, hail, snow, flooding and other weather-related events. This coverage is growing in importance due to the increasing frequency of extreme weather events.
• Broken windows and sanitary ware: It compensates to replace glass, windows, screens, and, in some cases, sanitary fixtures and countertops that are accidentally damaged.
• Aesthetic damages: It covers the costs of repairing cosmetic damage to walls, floors and ceilings following the repair of a covered event. 
• Loss of profits or rental income: In business insurance, this coverage compensates for the loss of income during the period that the business cannot operate following an event. 
• 24-hour Assistance: Professional services (plumbers, electricians, and locksmiths) available in emergencies to address urgent issues.
• Legal defence: It covers legal expenses incurred in proceedings related to the insured property or the activities protected by the policy.

Advantages of taking out a multi-risk insurance policy compared to individual insurance policies

A multi-risk insurance policy provides a number of advantages compared to purchasing multiple individual policies:

• Significant cost savings. The premium for a multi-risk policy is significantly lower than the total cost of taking out multiple separate insurance policies. 
• Streamlined management. With a single policy, you only need to manage one contract, one expiration date, one premium payment, and one insurer. This makes administrative management much simpler and reduces the risk of missed or forgotten payments.
• Avoid conflicts between insurance companies. When an event falls under the coverage of multiple policies, disputes may arise over which insurer is responsible. With a multi-risk policy, all risks are covered by a single insurer, eliminating this issue.
• More comprehensive cover. Multi-risk insurance policies often include additional coverages that may not be purchased separately, providing broader protection. 
• Agile processing should an event arise. Should an event occur, you only need to contact a single representative who will manage all the necessary coverage.
• Comprehensive knowledge of your coverage. With all coverages consolidated in a single document, it’s easier to see exactly which risks are included and which are excluded.
• Flexibility and personalisation. Many multi-risk insurance policies let you add or remove coverages to suit your specific needs, creating a personalised policy while retaining the benefits of an integrated package.

What is insurance, what types are there and what are they used for?

In day-to-day life, we all face risks that can impact our health, our possessions and our financial well-being. Insurance is an essential means of financial protection that helps us be prepared in the face of unexpected events. But what exactly is insurance? Insurance is a contract in which an insurance company, in return for paying a premium, agrees to compensate the insured or provide a service when a covered event occurs.

Understanding the different types of insurance available is of utmost importance when it comes to selecting the coverage that best meets your personal or family needs. From health insurance to home insurance, each type has a specific role in protecting different areas of your life. This article explains how insurance works, the different categories available and what each one is used for.

How does insurance work?

Insurance operates on the principle of solidarity and the transfer of risk. When you take out insurance, you sign an insurance policy that sets out the contract’s terms, coverage and exclusions. In return for paying a premium on a monthly, quarterly or annual basis, the insurer agrees to provide financial compensation or services should an event arise.

The process is as follows:

1. Contracting: the insured and the insurer agree on the coverage conditions.
2. Premium payment: the insured regularly pays the amount stipulated in the contract.
3. Occurrence of the event: if the covered event occurs (accident, illness, theft, etc.), the insured reports the event to the insurance company.
4. Compensation or benefit: the insurer reviews the case and then pays out the financial compensation or provides the service as stipulated in the policy.

By making small, regular contributions, this system enables individuals to be protected against unforeseen expenses that could lead to significant financial strain.

Personal insurance

Personal insurance policies are designed to protect individuals from risks that directly impact their health, physical well-being or life. This type of insurance protects against risks affecting individual and family well-being, providing financial support or medical assistance when it is most needed. The main types of personal insurance are:

• Life insurance. They provide financial compensation to the named beneficiaries if the insured person passes away. Life insurance comes in various forms, including term life insurance, whole life insurance, and endowment life insurance. These products are of utmost importance when it comes to providing financial security to the family.
• Health insurance. They offer access to medical, hospital and specialised healthcare services. Health insurance covers doctor visits, diagnostic tests, surgeries and treatments, ensuring access to quality healthcare. At SegurCaixa Adeslas you’ll find a range of health insurance adapted to your needs.
• Accident insurance. Provides coverage for injuries or death caused by accidents, whether occupational-related or personal. They can include compensation for temporary and permanent disabilities alike.
• Death insurance. Death insurance covers the costs associated with the insured’s death, including funeral services, legal procedures and support for the family during this difficult time.

Property or casualty insurance

Property or casualty insurance strives to safeguard individuals’ assets against financial losses resulting from physical damage. These insurance policies protect against damage to property, including homes, vehicles, businesses and other valuable assets. The following are worth highlighting:

• Home insurance. Safeguards the home and its contents from various risks, including fire, theft, water damage and natural disasters. Multi-risk home insurance policies usually also include civil liability coverage and legal defence. There are different home insurance options available so you can choose the one that best suits your needs.
• Car Insurance. There are various types of car insurance that protect your vehicle in the event of accidents, theft and damage to third parties. Options range from basic third-party liability insurance to comprehensive coverage, which provides the most extensive protection.
• Fire insurance. Although often included in home or business policies, fire insurance specifically covers damage to buildings and their contents caused by fire, explosions or lightning.
• Civil Liability Insurance. This type of policy protects against damages you may accidentally cause to third parties, whether to their person or their property. Civil liability insurance is of utmost importance when it comes to protecting you against financial claims resulting from accidents or negligence.
• Business insurance. Protects businesses against a range of risks, including losses from debtor insolvency, damage to facilities or inventory and civil liability.

Service provision insurance

Service-based insurance policies are designed to provide the insured with direct assistance through specific services, in addition to financial compensation. This type of insurance ensures access to professional services when they are needed. The following are worth highlighting:

• Travel assistance insurance. Travel assistance insurance offers medical coverage, repatriation, legal support and assistance with lost luggage while you are away from home. Travel assistance is of utmost importance so you can travel with peace of mind.
• Pet insurance. Pet insurance may cover veterinary costs, liability for damages caused by your animal, and additional pet care-related services, depending on the specific policy taken out. 
• Healthcare insurance. Similar to health insurance, but focusing on providing medical services directly through a network of professionals and affiliated clinics.
• Legal defence insurance. Provides legal guidance and covers expenses associated with legal proceedings the insured is involved in. Legal defence may be included as part of other insurance policies or purchased as a standalone coverage.
• Roadside assistance insurance. Provides roadside assistance, towing, replacement vehicle management, and other services when your car breaks down or is involved in an accident.

What are the different types of insurance used for?

Insurance plays several roles in our day-to-day lives, offering protection and peace of mind across a number of areas:

• Protect family health and well-being. Health and accident insurance ensures access to quality medical care without having to worry about the financial implications, safeguarding the well-being of every family member.
• Guarantee family economic stability. Life and funeral insurance provides financial support to the family in the event of death, helping cover expenses and preserve their standard of living.
• Protect heritage and material assets. Home and car insurance safeguard your most valuable assets from damage, theft or accidents, helping prevent considerable financial losses.
• Cover liability before third parties. Civil liability insurance protects you from financial claims resulting from unintentional harm you may cause to others or their property.
• Provide immediate assistance in emergency situations. Assistance insurance ensures prompt professional support in critical situations, whether for travel, vehicle breakdowns or legal matters.
• Provide access to professional services. Service provider insurance gives you access to qualified professionals without the burden of immediate costs.
• Protect the business activity. Business insurance protects businesses from a range of risks that could jeopardise their operations.
• Reassure and offer psychological safety. Being protected against unforeseen events reduces stress and enables you to plan for the future with greater confidence.

FAQs

Can coverage be combined between different types of insurance?

Yes, it is possible and advisable in many cases. Insurance companies provide bundled or multi-risk policies that combine various coverages into a single contract. For instance, a home insurance policy can bundle coverage for fire, theft, liability and legal defence into a single plan. Similarly, certain car insurance policies combine travel assistance with standard coverage. 

Bundling insurance policies is often more cost-effective due to package discounts and also streamlines management by centralising all your coverages with a single company.

What are the most common types of business insurance?

Among the most common business insurance policies is general civil liability insurance, which protects against third-party claims for damages arising from business operations. 

Multi-risk business insurance protects premises, inventory and equipment against fire, theft and other physical damage. Professional liability insurance is also crucial, as it protects against mistakes or omissions in the provision of professional services. Depending on the industry, specialised insurance may be required, such as credit insurance for debtor insolvency, cybersecurity coverage or electronic equipment protection. What’s more, if the company has a fleet of vehicles, car insurance is of utmost importance. The right combinations of these insurance policies ensures comprehensive protection for a business against its key operational risks.

Choosing the right insurance policy is important, as it will protect both you and your family in the event of unforeseen circumstances. This guide will give you the best tips to choosing a good insurance policy that will be the perfect fit for your needs, whether that’s for health, home, car or pets.

Tips to choosing the best insurance

Every type of insurance policy responds to specific needs, but there are some common criteria that you should take into consideration when taking out insurance. These factors will help you assess the options available and select the option that best fits your personal situation and your budget.

1. Analyse your needs

Before taking out any insurance, it is essential that you assess your specific needs. For health insurance, consider the size of your family, how often you use medical services, whether or not you need dental care and whether you want to avoid price rises for 3 years. If you are looking for home insurance, bear in mind the recommended value according to the square meterage of your home to avoid underinsurance or overinsurance, and check whether or not the insurance covers aesthetic repairs, a handyman service or items of value. To choose a good car insurance policy, estimate the value of the vehicle, check whether it allows additional drivers and decide if you are going to need a courtesy car.

2. Check what is covered

The coverage is the essence of any insurance policy. In health insurance, ideally it will include hospitalisation, emergency care and specialists. For home insurance, ensure it covers damages for water, fire, theft and civil liability. With car insurance, it must have third-party liability, roadside assistance and legal fees. This basic coverage will give you the peace of mind you need in any eventuality.

3. Check additional items covered

Optional items enable you to personalise your policy according to your specific needs. In health insurance, you can add dental care or alternative medicine. For home insurance, consider additional items such as protection for jewellery and valuable items or garden coverage. In pet insurance, decide whether to include veterinary care that goes beyond basic protection. In car insurance, find out if it gives you access to a courtesy car. 

4. Compare the scope of the assistance

The quality of the assistance service makes all the difference when you need it most. Look for insurers that offer customer service that is available 24 hours a day, 7 days a week. In health and car insurance, roadside assistance is essential, especially if you are travelling frequently. Good assistance should include quick processing, efficient responses to enquiries and immediate support in emergency situations.

5. Find out about valuation in the event of total loss (for car insurance)

For car insurance, it is essential that you know how the insurer values your vehicle in the event of a total loss. Some companies use the market value, while others offer the replacement value for the first few years. A fair valuation ensures you will be able to replace your vehicle at no significant financial loss, which is a major benefit when it comes to comparing the different insurance policies 

6. Take into consideration the medical services available or the assistance network

With health insurance, having a wide range of medical services is essential so that you can access the best professionals and healthcare centres near your home, or wherever you need this. Make sure that these include recognised specialists, benchmark hospitals and clinics in your geographical area. For car insurance, it’s important to have a large network of included garages with customer perks or the option to go to your preferred garage.  

7. Assess the quality of the customer service

Excellent customer service includes quick response times, friendly service and effective management of enquiries. A telephone service, online channels and straightforward processing are key indicators of the quality of the service that your insurer will provide.

8. Adjust the premium to your budget

When it comes to comparing prices, you will need to search for a balance between the cost of the premium and the coverage offered. Weigh up the quality-price ratio in view of the speed of the response you will get with a good health insurance policy, or the arrangements you will avoid having to make with full home insurance. A premium that fits with your budget will enable you to remain protected and enjoy peace of mind for the long term.

9. Check the exclusions and limitations

It is important to understand what situations are not covered by your insurance policy. Common exclusions include pre-existing conditions in health insurance policies, certain types of accidents or losses in home insurance or limits to insured capital. We also recommend finding out about established waiting periods before you can enjoy certain benefits. Knowing these limitations will help you have realistic expectations about your future insurance and your level of protection.

10. Trust the top insurers

Choosing an insurer with a solid reputation and experience in the sector offers the peace of mind of being in good hands. Established companies offer more stability, better customer service and a wider network of professionals. Confidence in your insurer is essential to feeling truly protected in any eventuality.

Why choose SegurCaixa Adeslas?

SegurCaixa Adeslas combines decades of experience with a personalised approach for each customer. Our wide range of policies can be adapted to the specific needs of each family, offering coverage that stands out for its quality and effectiveness. 

We are particularly renowned for our full roadside assistance available 24 hours a day, our leading range of medical services in the sector with the best professionals and healthcare centres, as well as our fair valuation system in total losses for car insurance.  

What’s more, our speed in managing accidents and losses makes us the trusted option for thousands of families seeking peace of mind and security.

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.