So, you’ve found your dream home in Madeira and begun the process of taking ownership. You have found a lawyer, a mortgage provider, and are ready to sign the deed with the Notary.
The next thing you need to consider is Homeowners Insurance. In this guide, we’ll explain the options available in Madeira and how to get cover.
In most cases, you will be required to have home insurance, as well as life insurance to take out a loan against your new property. Leaving your property open to risks, such as fire or theft, can have serious financial implications if you were not to be covered. In Madeira, like the rest of Europe, there are many options available for Home and Life Insurance, giving you peace of mind in the event of the unexpected. These policies can cover your new home and its contents.
Home Insurance in Madeira and Portugal – The Basics
Home insurance in Portugal and Madeira is not compulsory for everyone. However, you will need to take out a policy which provides the minimum level of cover if you buy a property and take out a mortgage with a Portuguese lender to finance it.
Home Insurance in Portugal is typically sold as an individual product, known as Seguro de Casa and there are three levels of cover available:
- Basic coverage – The minimum level of cover, Mortgage Loan Insurance, which protects the lender.
- Medium Cover – Homeowners Insurance, which protects your home and its contents.
- Creditor Insurance or Term Life Insurance, to protect you and your family if you can’t make your mortgage payment.
As with all insurance in Portugal, the ASF, Insurance and Pension Funds Supervisory Authority (Autoridade de Supervisão de Seguros e Fundos de Pensões) regulates home insurance in Portugal.
Home insurance companies in Portugal
There are many insurance companies in Portugal, and most of them sell home and contents insurance. Some of the largest and most reputable companies include:
Your Portuguese Mortgage Provider may also offer you Home and Contents Insurance along with your loan, which may prove to be cheaper than using a third-party provider, but you are not obliged to take a policy from your provider.
Can I insure my property in Madeira with an insurance provider from my home country?
Yes, you can use home insurance from abroad in Madeira, but only if the policy specifies coverage in other countries, including Portugal. There are policies aimed at ex-pats which offer global coverage for your belongings, however, if you finance your home with a Portuguese Mortgage Provider, they may specify that it must be with a company regulated by the ASF in Portugal.
Homeowners Insurance
Homeowners insurance, or building insurance, is known as Seguro de casa in Madeira and Portugal and falls into two categories:
- Seguro de Incendio (Fire insurance) – this is the minimum level of insurance for buyers financing their purchase with a mortgage. Cover includes fire damage, and most policies also cover flood, storm, and electrical damage.
- Seguro Multirriscos (Multi-risk Insurance) – Extended comprehensive coverage. Typically a tailored policy based on the needs of an individual and can include public liability cover, contents coverage, legal protection, earthquake protection, and the cost of alternative accommodation in the event your home becomes uninhabitable.
Many insurance companies in Portugal sell additional policies which cover you for specific risks. These can include condominium insurance for apartments and communal buildings, and home-workers insurance for those running a business from home.
Contents Insurance
If you are looking for a policy to insure your belongings, Seguro de Conteúdo, Home Contents Insurance, protects your movable goods from damage and theft.
In most policies, the contents of your home are protected from accidental damage and theft. Stand-alone policies are available which may offer more protection, so check the value of protection with your provider before making a commitment.
If you are renting a property in Madeira before you buy, you may want to take out a separate contents policy, unless your landlord has an extended policy that covers their tenants’ belongings.
If you take out content’s insurance in Portugal, you can usually choose your level of coverage. The basic packages can cover fire, storm, and electrical damage, as well as theft. However, pay attention to common exclusions that you may need to pay extra for. These include damage due to negligence, like leaving your taps running when you go out, or fire caused by a candle/electrical product being left unattended. Another exclusion is product manufacturer defects (for which the manufacturer is usually liable). Generally, the wear and tear of your products are not covered by your insurance.
The items covered under basic policies include house furniture, clothing, jewellery, and electrical goods. Common exclusions that you can cover for a higher premium include:
- Valuable items, such as rare art
- Item with a value of more than €2,500
- Items such as garden furniture and barbeques left outside the property
When you submit a claim, your insurer will typically pay for the replacement or repair of goods covered in the policy following an investigation.
Liability insurance
Seguro de Responsabilidade Civil, (Civil liability insurance), is often a feature of multi-risk Homeowners Insurance. This level of coverage isn’t a mandatory requirement but, many people choose to include this in their cover. It is also available as a standalone policy from many providers.
Liability insurance is designed to protect against injury and damage to third parties and their property in your home, or on your property. These could be guests or visitors, or contractors working in your home. Standard policies typically pay out for property repair/replacement and medical costs. Some policies also cover funeral costs, in the event of death, as well as legal costs if someone were to take you to court.
The cost of Liability insurance policies depends on the level of coverage you take out, as well as the limit you place on the coverage. Policies begin around €25 to €30 a year and cover you for the value of €50,000. Higher coverage up to the amount of €250,000 typically costs €50 or more per year.
What are the costs for Home Insurance in Madeira?
The cost of home insurance in Madeira depends on a range of factors. These include:
- The type of property you wish to insure
- Size of your property
- The property’s location
- Your property’s appraised value and condition
- Whether it is your primary or secondary residence (it can be more expensive property is vacant for long periods)
- Your personal claim history
- Level of insurance coverage required
Simple policies begin at around €80 a year, while multi-risk policies start at around €100 a year. For a large, furnished property, you can expect to pay around €400 per year for multi-risk coverage.
Many insurance providers have an online calculator where you can get a quote based on your circumstances, allowing you to take an estimate from multiple providers before deciding.
Choosing a Home Insurance Policy – What to look for
When choosing a Home Insurance policy, you should consider all the various factors rather than just opting for the cheapest deal on the market. Things to consider include:
- Is there a no-claims bonus can you accumulate, and can you lower premiums by paying a deductible or insurance excess?
- Check for policy exclusions. Make sure everything you need is covered and avoid paying extra for coverage that is not necessary.
- Do your research and check customer feedback to see how the company fares in product delivery and treatment of its customers
- How straightforward is the claim process? What is required when you file a claim and how long can you expect to wait to be reimbursed.
- Are there other financial or gift incentives offered with your policy?
- What are the company’s ethical values? How does the company score in terms of ethics, sustainability, and corporate social responsibility (CSR)? You can check performance ratings on sites such as CSR Hub and EcoVadis.
Applying for your homeowner’s insurance in Madeira
Every insurance company in Portugal and Madeira have their own application process. You can usually start the process by filling in the online quote form. You will then be able to purchase coverage online or an agent will contact you. Of course, you can also apply by phone or visit your local branch.
When you take out a policy, you will normally be asked to provide:
- Personal details including your name, date of birth, and address
- Information on the property you want to insure, including the appraised value
- Your NIF, Portuguese Fiscal Number
- Bank account details
Your policy will begin you have made the first payment. Your insurer will provide a unique policy number to be used in all claims and correspondence, along with an information pack that includes the claims process and a claims form. This is usually sent to you electronically, although you can request physical copies by post.
Making a claim against your policy
Most insurance providers allow you to file a claim online via their claims portal. The information pack provided by your insurer will detail all the processes involved, including deadlines for filing a claim, their projected turnaround times, as well as any specific requirements you must do as a policy owner during the claim process.
Usually, you will need to fill in a claim form that includes your policy number, details of the claim, and date(s) of the incident. Pictures of any evidence are usually required as well as a police report in the event of theft, criminal damage, or vandalism.
A dedicated claims manager will be assigned to your case who will act as your liaison during the claims process and let you know if they require any additional information. In most instances, straightforward claims take around two weeks to settle.
Cancelling a contract or changing your insurance provider
Your insurance contract will include your provider’s cancellation policy and your rights as a consumer. Either party can terminate the agreement at any time if they have a good reason and provide a notice period, usually 30 or 60 days.
Policies normally last for one year and can be paid for on an annual or monthly basis. In some cases, paying for your policy annually can be cheaper than monthly. Be aware that policies usually auto-renew if you don’t give notice before the contract end date.
With most Portuguese insurance companies, you need to cancel the policy in writing. This may be via letter, email, or online form, depending on the company’s procedures.
Where to make a complaint about your insurance provider?
If you need to make a complaint about your insurance company in Madeira, contact the internal complaints department of your insurer in writing. The company should inform you of its complaints procedure when you take out your policy.
If you are dissatisfied with the outcome of this process, or if you don’t receive a response, you can take your complaint to Provedor do Cliente das Empresas de Seguros, (Portugal’s Customer Ombudsman). In Portugal and Madeira, all insurance companies are legally required to appoint an independent, external, Customers’ Ombudsman.
The contact details will be available in your contract and online. You can take your complaint to the ombudsman if you have not received a satisfactory response from your insurer within 20 days. The ombudsman will try to resolve your complaint within 30 days. After this period, if you are still unhappy with the outcome, you can approach the ASF complaints service.
Holiday home insurance in Portugal
Portugal is a popular location for holiday properties, and regions such as Madeira and Porto Santo have large English-speaking ex-pat populations. Because of this, many companies sell holiday home insurance in Portugal tailored towards the specific risks of owning a holiday home. For example, loss of rental income or damage to an unoccupied property.
You can search for holiday home insurance deals with regular insurance providers. Alternatively, you may be able to find holiday home specialists in your home country.
Useful resources
Portugal’s Complaints Book (Livro de Reclamacões) – register your complaint online
Insurance and Pensions Fund Supervisory Authority (Autoridade de Supervisão de Seguros e Fundos de Pensões – ASF) – insurance regulator in Portugal
How can Madeira Estate Help?
As well as being a dedicated team of Real Estate agents, we can offer more services when you relocate to Portugal. Our experienced team can offer advice of Home Insurance, as well as Company Formations and connect you with Tax and Business Consultants.
Contact a member of the team today and discover how we can help you make your dream to move to Madeira a reality.
