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1. General
information
Insurance
is a contract relationship entered into by the insurer and
the insured. Such a contract, more commonly called
the policy, usually provides that, on payment of the
premium, the insurer promises to indemnify and
reimburse the insured for any loss incurred by him from
certain stated causes.
The
policy, as a contract, must contain all of the elements
necessary for a valid contract. The mutual considerations
here are the premium paid by the insured and the promise of
coverage made by the insurance company.
The causes
of damage as provided for in the policy are also called
"risks". The company specifically stipulates those risks
which are covered under the particular policy. Any risk that
is not stated shall not be included.
A policy
must have a subject which is to be insured. It may be
the life of a designated person, a house…
The risk or
peril against which the life or property is to be
insured must be specified in the policy: the death of a
person, liability resulting from the negligent operation of
an automobile…
The
amount for which the policy covers the loss must be
indicated.
The
insurance taker is the holder of the policy. Normally the
term during which the policy will be in effect is 1 year,
after which it is renewed automatically unless you
decide not to renew it, in which case you should previously
advise the insurance company 2 months before it is
due.
2.
Proposal for insurance
Your
application for an insurance do not oblige you to
finally contract it. On the contrary, the insurance company
is bound by the terms and conditions of its proposal
for insurance for a term of 15 days.
3.
Cancellation
An
insurance company may cancel an insurance policy only
under the following circumstances:
-
If the
insured has lied or made false statements
on his/her application or in a claim he/she submitted.
-
If the
peril covered is increased. In these cases
when there is no good faith, the insurance company shall
pay the difference between the premium
agreed and the premium which should have been paid for
the increase of the risk.
-
If the
insured object is sold.
-
Failure to pay premiums when they fall due, there is
a 30-day grace period available to the insured to give
him an opportunity to pay the premium without affecting
his rights under the policy.
An
insured may cancel an insurance policy in the
event that the insurance company refuses to modify the
policy when the new circumstances arisen can make the
premium reduced. The policyholder is entitled to a
refund calculated as the difference between the premium paid
and the premium which should have been paid since the peril
reduction was noticed.
4. In case
the insured event occurs
If the
insured event occurs, the policy taker or the beneficiary
shall notify the insurance company within 7 working days,
unless other period is stated in the insurance contract.
Failure to give timely notice can result in an
indemnification for the insurance company.
The assured
must furnish a list of the items lost or damaged. The
insurance company will investigate it and value the
damages, it shall pay an indemnity or repair
the insured object.
The
insurance company shall pay part of the indemnity within
40 days from notice of loss, full indemnification shall
be paid within 3 months from the notification date.
The
insurance company may not pay the indemnity if it
feels that the policyholder engaged in some type of
misconduct which voided the coverage.
5.
Complaining before the Spanish judge authorities
If the
insurance company won't pay the claim or won't pay what the
insured think the claim is worth, the insured may file a
lawsuit against the insurance company. The type of court
procedure will depend upon the amount to be claimed: either
ordinary court procedure (juicio ordinario), or
oral court procedure (juicio verbal) can be
taken.
The
period of time within to file the lawsuit will be:
-
2
years, from the date of the report of the event, if
the insurance only covered material damages (property
insurance or car insurance),
or
-
5
years, from the date of the report of the event, if
the insurance covered personal injuries (life or medical
insurance). The insured may also claim before the
General Insurance Office (Dirección General de
Seguros).
Because of
the complexity of insurance policies and because the
resolution of coverage disputes often depends on careful
analysis of the circumstances of the case, the assistance of
an experienced Spanish Lawyer
is strongly advisable.
6. Types
of insurance
6.1.
Homeowner's insurance
The
homeowner's insurance (seguro del hogar) covers
your house, the home itself and the things you keep in it
against disasters: fire, wind…
The
premium of the policy will depend on the value of the
house, the things you keep in it and the risks you wish to
be covered.
While a
house is rented, it may only be
insured by the landlord, the tenant may insure
its content.
There is no
law that requires a homeowner to have insurance, however, if
you borrow money to buy a house,
the bank will normally require you to contract, at least, a
fire insurance to protect its interest until the loan is
repaid.
6.2. Life
insurance
A contract
of life insurance (seguro de vida) provides that, in
consideration of the premium to be paid, the insurer
promises to pay the beneficiary an agreed sum upon the
death of the person whose life is to be insured.
The person
whose life is insured is generally called the "insured".
The person named in the policy to benefit from the death of
that person is called the "beneficiary". Where the
policy contains the identity of the beneficiaries, they will
not have to wait for the estate
partition to be made in order to perceive the
indemnity.
The
insurance company normally requires a medical exam
from people who are applying for life insurance.
The company
may specifically exclude certain coverage, such as
the coverage of death by suicide.
6.3.
Health insurance
In this
case the insurer agrees to pay to the insured a stipulated
sum in the event of illness or temporary
disability, as well as cover the cost of medical
assistance.
There are
two types of health insurance:
-
Medical assistance: The insurance companies have a
wide range of doctors who may assist you. The coverage
will depend upon the terms agreed in the policy.
-
The
reimbursement of expenses for medical assistance: in
this case you choose the doctor, the insurance company
shall return the medical expenses to you within certain
limits.
The health
insurance does not cover some specific situations
such as the hospitalization in case of transmissible
diseases (AIDS), medical treatment for alcoholism, addiction
to drugs, labor accidents …
Frequently
the insurance companies do not admit insurances for
persons aged over 60 years old, in case they admit
them, the policy cost will be increased.
Coverage
period is for 1 year, the policy costs are increased
every year.
6.4.
Automobile Insurance
Insurance
in Spain relating to automobiles can be divided into 2
categories:
6.4.1.
Third party liability insurance
The third
party liability insurance (seguro de terceros o de
responsabilidad civil obligatoria) is mandatory in
Spain. It is the minimum insurance required by Spanish law
to drive a vehicle in Spain.
It
covers the risk for causing personal injury and
damage on third party's property (driver and passengers in
another car with which it collided, passengers on the car
who are not members of the insured family, pedestrians…).
The
maximum indemnity this type of insurance covers is:
-
In case
of personal injury: € 336,566.78 per victim
-
In case
of property damage: € 96,161.94 per victim
In case of
personal injury, the responsible for the accident will not
be obliged to pay indemnity when proving that the injuries
resulted from the injured party negligent operation or from
force majeure.
This type
of insurance does not cover:
-
Personal injury of the insurance taker, the
driver or the owner of the insured car.
-
The
damage caused to the insured vehicle, the
things it kept in it, personal property of the insurance
taker, the driver, the owner of the insured car and the
spouse and relatives.
This type
of insurance will not cover the damages caused in any
of the following cases:
-
If the
driver were under the influence of drugs or alcohol.
-
Where
the vehicle is driven by a person that the owner
did not authorize
-
Where
the driver does not have driving license
However, in
any of these cases, the insurance company shall pay the
corresponding indemnity to the injured party, which may be
protested against the insurance taker.
Extra
cover can be added to the insurance policy, driver and
passenger insurance (seguro de ocupantes) is strongly
recommended as the third party liability insurance does not
cover the driver or his family and they must be insured
separately.
6.4.2.
Full comprehensive insurance coverage
The Full
comprehensive insurance coverage (Seguro a todo riesgo)
covers the injuries and damages non-covered in
the third party liability insurance:
-
The
injuries to the insurance taker, the car owner, driver
and the spouse, ascendants, descendants, relatives and
the car passengers.
-
Damages
to the vehicle irrespective of how it is caused. This
insurance also includes coverage against fire and
breakage of glass.
-
Damages
of the car contents.
-
Theft
of the vehicle….
If the
insured fails to pay the policy, he or she will have 5
months to pay it, when paid within this period of time,
coverage will be recovered in 24 hours.
If you wish
to contract an automobile insurance in Spain, it is
advisable to bring proof of no claims from your
previous insurance company, as this will help reduce your
insurance premiums. If you have moved from another European
country perhaps your old insurance company also operates in
Spain, this might help you to get a better rate as they can
check your claims history faster.
These are
only general guidelines and not definitive statements of the
law, all questions about the law's applications to
individual cases shall be directed to a
Spanish Lawyer.
Article by iAbogado Servicios Jurídicos SL (Madrid, Spain).
Visit
www.iAbogado.com for more
original content like this.
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