Marina Farina from Instasure answers some of the most common FAQs when it comes to property insurance in Portugal.
Sandy beaches, medieval castles, cobbled streets and turquoise waters are synonyms of Portugal and some of the reasons that make this country unique. Portugal and its islands (Madeira and Azores) are a popular European destination for British expats wanting to buy a holiday home or owning a main home abroad.
In fact, Portugal attracted more than 12 million tourists in 2017 with Britons making up the highest amount of these visitors. For this rich variety of landscapes, silver coasts, and traditions, sometimes it’s necessary to make a list of what you want out of a Portuguese property and what better suits your needs (e.g. swimming pool, the potential for renting out, countryside or city apartment, etc.). Are you passionate about Portugal? Will your next home be a villa in Portugal or an Algarve beachside property? Learn more by reading this article on A Place in the Sun about the best places to buy a property in Portugal.
Once the buying process is done, there are still important things to consider when relocating to Portugal: non-habitual residence tax scheme application, setting up utility connections and bills, legal advisor… but what about holiday home insurance? Maybe there were some factors you didn’t consider in your insurance policy?
Which cover do you need for your holiday home in Portugal?
If you're tempted by houses for sale in Portugal, you may be aware that British citizens are unlikely to come up against many restrictions, although being a resident in Portugal can influence how much you can borrow. Besides, most banks will include buildings insurance as compulsory when you get a mortgage (buildings insurance generally just covers the structure of your property from fire, earthquake, flooding, or storm damage). Contents insurance is usually not required by mortgage providers but if you want to include it, then it might be cheaper to buy it as a joint policy as buildings and contents insurance.
How long is the holiday home going to be unoccupied for?
Holiday homes can have a higher risk than homes in the UK because they tend to stay unoccupied for longer periods of time, typically during the winter season. This can mean unoccupied holiday homes are more likely to be a target for thieves, vandalism, or other hazards can occur.
Normally cover for unoccupied homes applies up to 60 days, then after when money or valuables would need to be removed and loss of metered oil or water could be excluded.
Even if Portugal is not as cold and rainy as the UK, winter temperatures might affect your property and frozen or burst pipes could occur, which can cause extensive damage to your property and possessions. So it’s important to understand the policy wording to identify what cover might be excluded when your home is unoccupied. Identifying early risks can minimize potential loss and damage.
Would you like to use your holiday home for letting?
The popularity of Portugal as a tourist destination for Britons can make owning an overseas home an ideal financial opportunity if you’re considering letting your property out to get extra income from it. So public liability insurance must be considered if you want to use your holiday home for letting out when you or your family are not there, and this helps protect you in the event a guest claims against you for an accident at your holiday home. Not all local insurers may provide public liability insurance as standard in your house insurance.
Is emergency travel and alternative accommodation cover important?
If your holiday home is uninhabitable during home repairs in the event of a claim, you and your family, or paying guests who are in the property, might need to get a ticket and return to the UK or find alternative accommodation. Emergency travel and alternative accommodation cover can be useful features if you cannot stay in your holiday property or even in the country.
Affordability is one of the main reasons when looking for insurance, as well as payment options for your overseas home insurance. When considering buying a holiday home, finding overseas property insurers in the UK is an option. So if you decide you want to spend quality time in Portugal and seek to enjoy good weather, environment, and gastronomy even if you don’t speak much Portuguese there are plenty of ideas and solutions for you to think about.