Does your community of neighbors have an insurance policy? Sometimes many people confuse the community insurance with their home insurance. It is not the same, and neither does it have the same coverage.
In all of Spain there are only about 750,000 insured buildings. The latest report by the Insurance Business Association UNESPA states that insured homeowners’ associations recorded almost 1.3
million mishaps in 2019.
According to UNESPA data, an average community registers at least one mishap per year. Most of these problems in homeowners’ associations are leaks or problems, in
general, of downspouts and water pipes. Specifically, there are almost 800,000 cases a year. One every 40 seconds, with daily payments exceeding 700,000 euros.
Data that show that having a community insurance will help us to solve many problems and avoid headaches in the future.
What is covered by the community insurance?
The Community insurance is a multi-risk policy that is paid for by all the neighbors of the building and that usually covers all the problems that may occur in the common areas of the building:
- Water damage: burst pipes, water leaks, leaks, leaks…
- Fire and fire damage
- Electrical damage
- Other damages to windows or communal elements of the property, civil liability, etc.
Let’s see what we should know about this community insurance.
If I have home insurance, do I need community insurance?
Yes, because both cover different situations. The main difference is that home insurance covers the contents of your home, that is, what is inside your home:
- Furniture
- Fixtures and fittings
- Jewelry
- Valuables
The community insurance focuses, above all, on the common areas of the building. If there is a leak in your landing or a problem in your facade, even if you have home insurance, you will need a complementary coverage of the community insurance to be able to repair it without problems. Problems with the elevator, the roof, non-payments of neighbors, etc, all these situations are taken care of by the community insurance, not the home insurance.
Also, remember that as we have seen, on the one hand, there are the pipes of your home (which you should cover with your home insurance), and on the other hand, the community pipes, whose damages should be covered by the community insurance.
Is homeowners’ association insurance mandatory?
According to the Horizontal Property Law, it is not mandatory for the community of neighbors to have a policy. However, in some communities it is required to have specific insurances, such as being insured for fire risk and damages to third parties. In any case, it is highly recommended to have this insurance.
And although community insurance is not mandatory at the national level, some Autonomous Communities, such as Madrid and Valencia, have made it mandatory.
In the event of any unforeseen event, if there is no community insurance, each neighbor will have to pay proportionally for the damages caused.
To avoid adding more problems to the incident itself, as we all know the economic difficulties that can arise from this, having a community insurance policy makes it as easy as possible to solve this type of problem.
For example, in many of the water damages it is the community insurance that must take charge in the case of community pipes or downspouts, which are also a common element. In fact, the most common claims are for water damage, atmospheric phenomena, glass breakage and civil liability.
Price of community insurance
The price of a community of neighbors insurance depends on several factors, but as a summary, the most economical insurances in small communities can go from 200-300 € to 600-700 €. All this, depending on:
- the coverage underwritten,
- what liability capital it offers,
- whether there is an excess for water damage or not.
In communities of a larger size it varies much more, since there are communities with more than 5 floors and that exceed 1,000-1,500 € and others that can exceed 20,000 € if their size is important (for example buildings with multiple portals), and have qualities that aggravate the price.
What is taken into account when calculating community insurance?
In order to calculate the price of a community insurance, several factors of the property must be taken into account, mainly:
- Age of the property and its state of conservation. It will depend on this whether an excess can be applied in water damage, for example, or whether it is necessary to see the community by an expert of the insurance company in order to be able to make the policy.
- Building size: a 3-story house with 2 floors on each floor has nothing to do with a 4-building community, 9 floors each and 3 floors per floor.
- Services included in the community: for example, if it has a swimming pool, playground and doorman, the price will be higher than those communities that do not.
How do I know which community insurance policy to take out?
When it comes to choosing choosing insurance for your communityinsurance, several factors must be taken into account:
- Type of community to be insured: that is to say, it is not the same to choose a community insurance for a normal block of flats as for one with green areas, swimming pool, etc.
- Necessary coverages: a basic community insurance is recommended to cover fire situations and damages to third parties. Obviously, this is insufficient. We will have to look for an insurance that covers those elements and situations suitable for our community, taking into account its particularities, the age of the same, etc.
- Amount of the insurance: depending on the number of neighbors and the cost of the community itself, this will be a factor to take into account. The economic issue can always be adjusted, so when choosing an insurance, bet for reasonable coverage, because the cheapest, in the end, always comes out expensive.
At PIB Group Iberia we are experts in helping communities of neighbors to choose the most appropriate insurance for each one. We work with dozens of insurance companies for neighborhood communities, which makes it easier for us to find the best solution for each neighborhood. If you have any doubts, contact us and we will guide you so that you and your neighbors can rest easy.
