Does your residents' association have an insurance policy? Many people sometimes confuse the community insurance with your home insurance. It is not the same, nor does it have the same coverage.
In the whole of Spain only there are some 750,000 insured buildings. The last report by the Insurance Business Association UNESPA points out that insured homeowners' associations recorded almost 1.3
million mishaps.
According to data from UNESPA, the average community registers at least one mishap per year. The majority of these problems in homeowners' associations are leaks or problems, in
in general, of downpipes and water pipes. Specifically, there are almost 800,000 cases per year. One every 40 seconds, with daily payments exceeding 700,000 euros.
This data shows that having a community insurance policy will help us to solve many problems and avoid headaches in the future.
What is covered by community insurance
The community insurance is a multi-risk policy that is paid for by all the neighbours 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 damage to windows or communal elements of the property, civil liability, etc.
Let's see what we need to 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, i.e. what is inside your home:
- Furniture
- Fixtures and fittings
- Jewellery
- Valuables
Community insurance focuses, above all, on the common areas of the building. If there is a leak on your landing or a problem on your façade, no matter how much home insurance you have, you will need complementary coverage from the community insurance to be able to repair it without problems. Problems with the lift, the roof, non-payment by neighbours, etc., all these situations are covered by the community insurance, not the home insurance.
Also, remember that as we have seen, on the one hand, there are the pipes in your home (which should be covered by your home insurance), and on the other hand, there are the community pipes, whose damage should be covered by the community insurance.
Is homeowners' association insurance compulsory?
According to the Horizontal Property Law it is not compulsory. that the residents' association has a policy. However, some communities require specific insurance policies, such as insurance against fire and damage to third parties. In any case, it is strongly recommended to take out this insurance..
And although community insurance is not compulsory at national level, some Autonomous Communities, such as Madrid and Valencia, have made it compulsory.
In the event of any unforeseen event, if there is no community insurance, each neighbour will have to pay proportionally for the damage caused.
In order to avoid adding more problems to the claim 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 cases of water damage, it is the community insurance that must take care of the community pipes or downpipes, which are also a common element. In fact, the most common compensation claims are for WATER DAMAGE, The insurance covers the following risks: weather phenomena, breakage of glass and civil liability.
Price of community insurance
The price of a homeowners' association insurance depends on several factors, but in summary, the cheapest insurances for small communities can go as follows from 200-300 € to 600-700 €.. All this, depending on:
- the coverages underwritten,
- what liability capital it offers,
- whether or not there is an excess for water damage.
In larger communities, it varies much more, as there are communities with more than 5 floors and exceeding 1,000-1,500 € and others up to more than 20,000 €. if they are of significant size (e.g. buildings with multiple portals), and have price-aggravating qualities.
What is taken into account when calculating community insurance?
In order to calculate the price of a community insurance, several factors of the property have to be taken into account, mainly:
- Age of the property and its state of conservation. This will determine whether an excess can be applied to water damage, for example, or whether the community needs to be inspected by an expert from the insurance company in order to be able to take out the policy.
- Size of the building: a 3-storey house with 2 floors on each floor has nothing to do with a community of 4 buildings, 9 floors each and 3 floors per floor.
- Services that includes the community: for example, if it has a swimming pool, children's 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 insurance for your community, There are a number of factors to take 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 coverage: basic community insurance is recommended to cover fire and damage to third parties. Obviously, this is insufficient. We should look for an insurance policy that covers those elements and situations that are appropriate for our community, taking into account its particularities, its age, etc.
- Amount of insurance: Depending on the number of neighbours 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 policy, opt for reasonable coverage, as the cheapest always comes out expensive.
At PIB Group Iberia we are experts in helping communities of neighbours to choose the most suitable insurance for each one. We work with dozens of insurance companies for residents' associations, which makes it easier for us to find the best solution for each neighbourhood. If you have any doubts, contact us and we will guide you so that you and your neighbours can rest easy.
