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Landlord insurance in Spain

Landlord insurance in Spain is available to protect the policyholder from the costs and financial losses incurred as a result of non-payment of rent by the tenant. Additionally, the policy will assist with eviction proceedings resulting from non-payment. The insured receives the full amount of rent due but unpaid by the tenant. This will continue each month that the rent is unpaid until the situation is normalised with the tenant, the tenant is evicted or the maximum amount of cover you contracted under the policy is reached.


Landlord insurance in Spain

Landlord insurance in Spain

If you are renting out a property in Spain long term then you can contact an insurance policy to protect you and various events including non-payment of the rent by your tenant.

Access to a team of lawyers to help you as the owner of the property. You will have access by telephone to specialists to help you with your queries.

Perhaps your tenant wants to leave part way through the contract. You can call to see if you can claim compensation or how this can be done in a way to make sure you are legally protected if you are in agreement.

If the tenant has stopped paying the rent you want to know the legal procedure you must follow.

There is no restriction to the number of times you can call the legal advice number.

Defence and claims related to the tenancy contract

When you rent out your property in Spain it is necessary to make a formal agreement. If there is a breach of the contract you can contact the insurance company. The insurance company will defend you and file claims in your name. For example, in the event your tenant does not pay the rent. Another example might be unpaid utility bills that have been specified in the tenancy agreement.

You might also want to use this service in a dispute with the tenant after they leave. For example, if you did not return the full deposit to the tenant because they had damaged your property. The tenant may file a claim against you. You can contact the insurance company to defend you.

Non-payment of the rent

The main reason people contract this type of insurance is to protect against non-payment of rent. The insurance company will pay the unpaid rent to you. It is necessary to start the legal eviction process with which the insurance company will assist you, to receive payment under this cover.

When you take out this type of policy you stipulate the maximum number of months of rent you want to be covered. For example, you might want cover for 12 months’ rent or you could choose 18 months’ rent. The decision on how many months of rent you would like covered will depend partly on the premium and also how long the court process to evict the tenants might take in your area.

There is a one-month excess with this cover. Most Landlords will have taken at least one month of rent as a security deposit.

Acts of vandalism

This coverage comes into effect after an eviction of a tenant claim or non-payment of rent claim has been made. If you discover your property has been vandalised then the insurer will act on your behalf. If necessary it will pay up to 100% of the sum insured at the new replacement value. There is usually an excess of around 300 euros on this type of cover.

Claims for extracontractual damages

If someone damages your property, a neighbour for example, then this coverage can assist you. Assume a neighbour above the property you rent out has a flood in their bathroom. This causes damage to your apartment. Your tenant is rightly upset and wants you to do something about it. This Landlord insurance in Spain has coverage. The insurance company will represent you against the neighbour that caused the damage to your apartment.

Another example might be when a neighbour carries out some renovations to their apartment. In doing so your neighbour causes damage to your side of an adjoining wall. You can contact the insurance company to make a claim against your neighbour, if necessary.

How much does Landlord Insurance in Spain cost?

The cost of Landlord insurance in Spain is very competitive. Imagine trying to collect unpaid rent on your own. Would you know how to do it correctly so as not to jeopardise your legal position? Is your own family lawyer specialised in this type of law?

If you want us to prepare a quotation for you then please get in touch. The premiums in 2022 for 12 months of rental cover were 4.82% of the total annual premium plus a small amount of tax (1.23 euros). For example, if the tenant pays a monthly rent of 500.00 euros then the premium in 2022 was calculated as 500×12=6000. 6000×4.82%=289.20 + 1.23 tax = an annual premium of 290.43 euros.

What is needed to contract Landlord Insurance in Spain?

Before you can contract Landlord insurance in Spain, the insurer will need you to provide some information about your proposed tenant.

Tenant is employed

In the case that your tenant is a salaried employee then you will need to provide copies of their last two salary slips (nominas). If the tenant has not worked for the same employer for more than 12 months but they have a full contract (contrato indefinido) and have finished any probationary period with the employer, then you should also provide a copy of their employment contract (contrato laboral). You will also need to provide a copy of their DNI/TIE or NIE and passport.

Tenant is self-employed

If the tenant is self-employed you will need to provide the last annual tax return for them (declaracion de renta). In addition, the last tqo quarters VAT returns (declaracion trimestrales del pago fraccionado de IVA). If these are not available then the last two social security receipts (pagos de autonomos a la seguridad social). Finally a copy of their DNI/TIE or NIE and passport.

Tenant is a pensioner or receives income from abroad

If the income is derived from the European Union then as long as the income criteria is met the insurance company will consider it on a case-by-case basis. You would need to provide a copy of the tenant’s DNI/TIE or NIE and passport. A certified copy of their annual pension and type of pension.

In all cases, you will also have to complete an application form, provide your identification and submit a copy of the rental contract.

When the insurance company assesses the annual rent and annual income of the tenant(s). The annual rent must not come to a figure higher than 40% of the tenant(s) net annual income. If it does then the insurance company may consider issuing the policy if a suitable guarantor can be added to the rental contract.

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Landlord Insurance in Spain protects you from non-payment of the rent among other things. However, it does not insure the property. You should consider property insurance to protect you renting out your property and also the property itself.