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This is what it can cost not to have a family liability contract for home insurance

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liability coverage is one of the most used on a daily basis in insurance

In the last post I spoke to you about home insurance, in this I continue to do so. At that time we saw that hiring home insurance is not mandatory, although it is recommended. One reason for hiring is on the insurance liability at home.

A few weeks ago a colleague told me how Murphy’s Law is ready to be fulfilled when you least expect it.

A boy was playing with the ball in the backyard of his house when it ran off hitting the windshield of a car that was driving down the street. From the shock, the driver lost control of the vehicle, going to the semi-empty tables of the corner bar. Fortunately, it was early Sunday and there were only a couple of clients who were injured.

Another event was related to the fire that had occurred in a semi-detached house due to a careless smoker. The fire spread to neighboring homes causing serious damage to the building and its contents.

In both cases, the damages do not occur by chance so someone will have to answer for their consequences. This article is about that, what it is and what home liability insurance covers.

What is the civil liability?

According to article 1902, civil liability is that of any citizen who by action and omission causes harm to another, intervening fault or negligence is obliged to repair the damage caused.

Therefore, for there to be civil liability, it is necessary that there has been damage to a third party. In addition, there must be some kind of guilt on your part and a relationship between your performance and the damage.

The obligation to repair the damage has as a consequence the economic impact that it can have on you. This capital loss will be directly linked to the severity of the damage caused.

In which cases may liability coverage be necessary for home insurance?

If you have liability insurance at home, you have a reason to sleep more peacefully knowing that behind you there is an insurer to solve the problem that you have caused your neighbor below by leaving the tap running.

Having civil liability insurance in the home policy seems to be the best answer to any eventuality that occurs in your home and that affects other people or things. But it not only covers damage to third parties caused by the home but also those caused by the inhabitants of the home.

In the events that I related to you at the beginning of the post, you have an example of the damage that can be caused:

#1. Material Damage

Those caused to objects, houses, or goods to which you or your home cause damage have this consideration. The car, the marquee, or the neighboring houses in the story would be the material damage.

#2. Personal Injury

As you well have assumed, it is about the damages, injuries, and expenses that you may have caused to people. Returning to the incidents of the presentation, it would be personal injuries caused to the customers who were on the terrace of the bar.

Now we will see how the coverage of the civil liability insurance in the home includes the acts caused by all those who live in the insured risk.

Property liability in liability insurance

There are many incidents whose origin is in the home itself or in its facilities. A ruptured pipe can cause significant damage to the neighbor downstairs or to the neighboring dwelling. But imagine if a flower pot or a tile falls and unfortunately hits a vehicle or a pedestrian.

The real estate civil liability insurance covers damages caused to a third party by the use of the home. Therefore, covered damages are those that originate in the building, its facilities, and the contents of the house.

These are in broad lines the coverage provided by real estate civil liability:

  • Damages caused by the use of the house and those caused by the common elements of the building where it is located.
  • Those events derived from the maintenance and repair work of the home provided that the necessary permits are in place. When the person who performs these works is a third party and is the cause of the damage, the civil liability insurance in the home remains in the background, and only in the absence of insurance or insolvency of the deceased will it come into operation.

If real estate liability covers damage caused by the use of the home, what happens when it is rented?

While this is essential coverage for the homeowner, it is also essential for the renter. This will have to respond to the damages caused by the content elements and in many cases, it will also have to do so for incidents caused by the facilities of the continent.

Family responsibility a guarantee that covers much more than your children’s mischief

Family responsibility not only covers the policyholder or the homeowner, but it also covers those people who live in the family home and are financially dependent on the insurance holder. This means that the insurance covers your spouse, children, domestic employees, and all those dependents who live in the house. In addition, the coverage is not limited to damages caused inside the home, also those caused outside.

These are some of the facts covered by family responsibility:

  • The damages that you may cause that are not related to a professional activity,
  • Damage is caused by sports or leisure activities practiced as an amateur.
  • The possession of domestic animals, as long as they live in the house, ensures. But beware that it has limitations. For example, dogs of potentially dangerous breeds must have their own liability insurance, being excluded from this insurance. You should also be careful with pets, reptiles or big cats are not covered.
  • The consequences derived from carelessness with the fire or the omission of the closing of a tap are also covered.
  • If you like barbecues and invite friends and family, the consequences of food poisoning are also covered, of course, as long as you invite and do not charge for the food.

As you can see, family liability insurance covers you much more than the mischief of your children.

The locative civil responsibility, a guarantee for the tenant

You live for rent, you have gone away for a weekend, and when you return you find that you left the tap running. The water has overflowed and the damage is significant. And you have not only wet the neighbor below, in your house, but the water also reaches you over the moccasins.

If you have family liability insurance, you will not have problems to take care of the neighbor’s damages. But what about the damage to the home you occupy?

The leasehold liability coverage is intended to cover your liability to the homeowner when an accidental event that causes damage occurs. Usually, these damages are a direct consequence of fire, explosion, or the action of water.

How Much Does Home Liability Insurance Cover?

You will have noticed that both in property, family, or rental liability, home liability insurance provides coverage in all cases except when it is proven that there has been intent to cause the damage.

Also, like any other coverage, liability insurance has a limit. It is the capital that you have contracted and that will be reflected in the conditions of the policy. Subscribing a very tight amount may not be enough at the time of the claim, in which case the excess must be paid out of pocket. This is something that you have to take into account when hiring insurance.

On many occasions, determining who is responsible for a claim must be settled in court. This implies having legal coverage that is normally assumed by the insurer, who makes the lawyers available to you to help you solve the problem. The price that the insurer has to pay will depend on the success they obtain.

conclusion

There are many events in human life that can cause harm to a third party. Experience shows that liability coverage is one of the most used on a daily basis in insurance. The events of material and personal damage to third parties related to the home are more and more frequent. 

Home liability insurance is the mechanism with which to try to repair the damage caused.

It does not matter if you are the owner of the home or its tenant, in the article you have been able to see some of the risks to which you expose yourself. Lacking good home liability insurance certainly doesn’t seem like a good idea.

Home insurance is not mandatory, but if you appreciate the assets managed, I’m sure you’ll know what to do.

Why don’t you start by leaving us your answer to the question in the comments?

What capital do you have contracted for civil liability in your home insurance? Do you think it is enough?

Do I need to buy insurance if I have a potentially dangerous dog

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If it is a dog and it is classified as potentially dangerous, you need a license to have it.

Having a pet means that at some point it can cause harm to third parties. If it is a dog and it is classified as potentially dangerous, you need a license to have it. Do you want to know what requirements you must meet to obtain it?

The last week showed me some videos of a new friend who has missed one of my nephews. It is a puppy dog, of which I do not remember the breed but it does have a pedigree, and of which they tell me that it does not need PPP (Potentially Dangerous Dog) dog insurance.

At first, I was reassured to know that his breed is not classified as a potentially dangerous dog. But I must admit that I was disturbed to learn that when he grows up, he could be considered dangerous due to his characteristics.

A couple of days ago I was reading this headline in the newspaper 20 minutes: A loose pit bull without a muzzle bites a 19-month-old boy and the owner of the animal flees the place. We often see news related to attacks on people whose protagonists are potentially dangerous dogs.

In one of the last published posts, I spoke to you about the coverage of family civil responsibility for the possession of pets and its limitations. One of them is that certain breeds need to have their own PPP dog insurance.

I imagine that you have already discovered what this article is about. Exact of potentially dangerous dogs and the obligations of their owner.

What are potentially dangerous dogs?

Potentially dangerous dogs are those corresponding to these breeds and their possible crosses:

  • Pitbull terrier
  • Staffordshire Bull Terrier
  • American Staffordshire Terrier
  • Rottweiler
  • Argentine Dogo
  • Fila Brasileiro
  • Tosa Inu
  • Akita Inu

But in addition, the law considers potentially dangerous those dogs that have been a trainer for the attack. Also, those that have a marked aggressive character, who has been the object of a complaint for a said circumstance or for having carried out attacks on people or attacks on other animals.

Any dog ​​can become dangerous. Like any pet, dogs must be trained and educated to avoid possible behavioral and aggressive problems.

Other traits of the animal such as a powerful and robust appearance, agility, vigor or resistance, a voluminous head, with large and strong jaws or reaching a height of between 50 and 70 cm or a thoracic perimeter of between 60 and 80 cm or weight greater than the 20 kg, can include your dog among the PPP.

In addition to these details, each autonomous community has included its own races. Thus, for example, the Doberman is considered a PPP in the communities of Andalusia, Cantabria, Catalonia, Galicia, or Extremadura. These last four also share other breeds such as the Bullmastiff, Dogo de Bordeaux, or Presa Canario.

What requirements do you need to adopt a potentially dangerous dog?

To be able to adopt a potentially dangerous dog you need to have an administrative license that you have to obtain from your Town Hall. But for it to be issued you must meet a series of requirements:

  • Be of age.
  • Not having been convicted of crimes of homicide, injury, torture, against freedom or against moral integrity, sexual freedom, and public health. Nor may you have been associated with an armed gang or drug trafficking, or deprived by judicial resolution of the right to keep potentially dangerous animals.
  • Not having been penalized for serious or very serious infractions
  • Obtain a certificate of psychological and physical fitness.
  • Have an official veterinary certificate of the dog that confirms that it does not have any contagious disease, that it is correctly vaccinated and dewormed. And most importantly, it shows no signs of aggression.
  • Show that they have entered into an insurance liability for damage to third parties. The coverage may not be less than 120,000 dollars.

This license is valid for 5 years after which you have to renew it, having to comply with all the previous points.

What rules must a potentially dangerous dog meet?

A PPP dog, unlike those that are not considered dangerous, must comply with a series of rules. These are some of the security measures established by law:

Identify the pet and register it in the Register of Potentially Dangerous Animals of the municipality of residence of the owner. You are obliged to communicate the personal data and place of residence of the person who cares for and is responsible for the animal. If you change your residence for a period of more than 3 months, you must register it again in the corresponding autonomous community.

The abduction or theft of the animal must be reported within 48 hours after it is known. It must also be done when it is transmitted or dies, an act with which the registration sheet is closed.

When the PPP dog is in public spaces you must have the license and the inscription in the special registry at hand. In addition, you must adopt a series of measures, such as:

  • The use of an approved muzzle and appropriate to their morphology.
  • Always be tied with a strap or chain, it cannot be extendable and have a length greater than 2 meters. In Andalusia, for example, the length is limited to one meter and minors are prohibited from passing through places of leisure and recreation.
  • You will not be able to walk two or more potentially dangerous dogs at the same time.
  • It is prohibited for an animal considered potentially dangerous to be unleashed or outside a closed area, although it is private property.

Failure to comply with these rules can lead to penalties that can range from 150 dollars for a minor infraction, up to 15,000 dollars for those considered very serious. Among the latter is abandoning it, selling or transmitting without a license, not having a license, or training it to activate its aggressiveness.

PPP dog insurance, when is it necessary and why?

Having a pet, be it a dog or another animal means that it may cause harm to third parties. Therefore, it is advisable to have civil liability insurance that covers these damages. The normal thing is to have this coverage included within the family civil responsibility of the home insurance. Sometimes it is insufficient or simply the law requires you to take out specific insurance.

Before I told you that to obtain the license to have a PPP it is necessary to prove that you have subscribed to a civil liability insurance to cover material and personal damage caused to third parties. Therefore, PPP dog insurance becomes compulsory insurance. And as with other mandatory insurance, it must meet a series of requirements, including guaranteeing a minimum capital.

In addition to civil liability and legal defense, PPP dog insurance has other coverage that you can purchase additionally. These include specialized telephone assistance or veterinary assistance. You can also contract the collection of compensation if the animal is accidentally killed or stolen. In case of loss or misplacement, advertising or reward expenses for its location.

conclusion

Having a pet comes at a cost. And if it is a PPP dog, the budget increases considerably. To be granted the license you have to go through the cash register to obtain the certificate of psychological and physical fitness. You will also have to pay for the veterinary certificate that proves that the animal is not sick. And finally, you will have to pay around 60 dollars for basic PPP dog insurance. If you want more coverage, you can pay double this amount.

It is proven that the most decisive factor for a dog to be emotionally stable is good learning and not the breed. But you may have noticed that the demands between one place of residence and another may vary. This leads to some questions that, once again, demonstrate the inequality suffered by the citizen according to the community he belongs to.

How can it be that a dog can be considered potentially dangerous in one area, with the detriment that it entails for him and his owner and the neighboring area is not?

7 common mistakes to avoid when purchasing home insurance

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One of the most important decisions in our life is to choose the home in which we are going to live for a time - or our whole life -.

One of the most important decisions in our life is to choose the home in which we are going to live for a time – or our whole life – from that moment on it becomes the most precious asset. In it are our hopes and efforts, and that is why we must protect it in the event of an accident. So insuring it becomes a very important issue and many times we do not pay the necessary attention when purchasing home insurance.

Another email with the same problem. This week there are a few subscribers who have raised a similar issue and the origin of everything is in contracting home insurance with deficiencies.

Today we can find very good information on the web on any subject, insurance too. For example, this site, which aims to be a benchmark among consumers. Despite this, when purchasing home insurance, we continue to make the same mistakes, possibly for trying to lower the price of the policy.

I like to keep what I have, what about you?

Well, if you pay a little attention, in this post we are going to review the most common mistakes when purchasing home insurance so that you do not have problems if you suffer an incident in your home.

1. Not reading the particular insurance conditions

Due to lack of time, desire, or because we trust whoever sells us the insurance, we do not read the policy when it arrives. If we have hired it online, we keep the headlines and the price. If it’s the bank, how can we not trust whoever takes care of our money? And if it is the friendly mediator, an “if you already know I have it” is enough.

In fact, you will surely archive it and you will not review it again until you have a mishap and at that moment if it has an error in the wording, you will not be able to do anything if more than 30 days have passed since you hired it.

Falling into this error is easy, so you should read the policy when you have it in your possession. Take a moment to review some very important aspects such as the description of the insured risk, the capital contracted, or that coverage where there is a greater probability of having a claim.

With this, you will avoid anger and subsequent problems, in addition, you have a month from your purchasing for the company to correct those aspects that do not fit your insurance proposal.

2. Value the continent at purchase value

It is common, especially when the insurance is associated with a mortgage, to insure the home for the amount of the loan. The price you pay includes the building and the plot or the proportional part if it is flat. Insuring the value of the land is a mistake that is going to cost you money. The insurer, in the event of a claim, will compensate you for the reconstruction of the house on the same site.

Insuring above what the insured property is worth is throwing away money.

But the reverse circumstance also occurs, and it is common to insure the continent for a lower value to save on the price. By doing so, you may incur underinsurance and in the event of a claim, the compensation will be reduced in the same proportion as the uninsured capital.

Most insurers try to correct these errors by using guidance scales, based on the square footage of the home, the quality of construction, and the construction site.

Many companies already verify, when purchasing home insurance, the meters of the house through an online consultation with the Cadastre.

If you live in a residential building, check your community insurance to see its coverages.

3. Assess the assets in the home by eye

Have you ever stopped to think about how much everything you have at home is worth? Well, when purchasing home insurance you have to establish the capital that you want to insure for content.

A few years ago, to test a program that I had created to carry out inventories, I began to do my math. To my surprise, the library, the vinyl and CDs, and four paintings amounted to more than 1/3 of the capital that I had contracted in the insurance. I needed to include furniture, appliances and electronics, trousseau, clothing, kitchenware, jewelry, etc.

With this, I want to tell you that before subscribing to the insurance, you are interested in spending a good time evaluating everything you have at home. Take an inventory, breaking down those objects that have a special value such as works of art or jewelry. That way you can see if these objects exceed the limits imposed by the insurer in the contract.

An incorrect valuation of the goods can cause you to fall, as happens with the continent, in over insurance (you pay more) or in underinsurance (you charge less)

If you don’t know how to determine the value of your assets, enlist the help of a professional, an independent and objective expert.

4. Think that with purchasing a home insurance everything that happens is covered

Based on what was said in the first mistake, not knowing what the insurance covers often makes us think that everything that happens at home is covered. At the outset, I tell you no, and in the best case – with a household risk – neither.

Insurers for competition and marketing reasons have been including a multitude of “filler” covers. This may make us think that everything is covered, but they continue to exclude everything that smells like home maintenance.

You have to be very clear about what the insurance covers and whatnot, you will avoid later inconveniences or say that of…

Why do I pay for insurance if it doesn’t cover anything? Insurers are very ready to collect, but when it’s time to pay…!

5. That doesn’t happen to me

This is one of the most common mistakes.

There are many incidents where we think that it is impossible to happen at our house. According to the reports, a fire breaks out in a home every three minutes thirty-seven seconds. Every fourteen there is a leak and every 25 a glass breaks. You know, Murphy’s Law is wicked and can be enforced anytime, anywhere.

Do not underestimate what can happen in your home and less for saving four euros by eliminating coverage or hiding certain assets from the insurer. If you have doubts, I recommend that you read What guarantees do I need in my home insurance

6. Forgetting to review insurance periodically

If we do well with home insurance, we forget we have it. We only worry when we have an incident and then it is too late.

In the same way that your life changes, so does your house. You adapt it to your needs, acquiring new elements, or modifying existing ones. It will also depend on the economic period, whether the house is worth more or less. All these factors advise reviewing the insurance conditions every two or three years.

The incorporation of prevention or security measures, the use of the Internet of Things (IoT), can lead to a reduction in the price of insurance. Any variation in this regard or if they aggravate the risk, you should notify the insurer as soon as possible.

7. Compare the price of your insurance with that of the neighbor

This is possibly the most pernicious mistake of all. We tend to compare and equal ourselves and in insurance, the same thing happens.

Why is my insurance more expensive than the neighbor’s, when the houses are the same?

Possibly you are overlooking the reforms you have made, that the furniture is not from Ikea, or that the neighbor is more fearful and has installed bars and an alarm.

There are many factors that determine the price when purchasing home insurance. Any difference in risk, capital, or coverage means that you pay a different price. Also, think that you contract within the framework of the free market, so each insurer sets the price according to its economic sufficiency.

conclusion

These are the most common mistakes when purchasing home insurance. To avoid them, you should spend a little time on it, analyze what the market offers you before deciding.

An insurance policy is an adhesion contract. When you subscribe you are accepting the conditions imposed by the insurer. They establish what are the coverage, limits, and exclusions that will govern the contract. If the nature of the property or the fact that has caused the damage does not match the conditions of the policy, the incident will not be covered.

So when purchasing home insurance, you have to be clear that the policy must be expertly tailored by … an expert. This rules out doing it through comparators, telemarketers, brothers-in-law who make insurance to get a few euros, consultancies, or banks.

And you, do you want to take the risk?
Do you have an expert to advise you not to make these mistakes?

5 frequent mishaps that result in compensation for domestic accident in home insurance

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domestic accident in home insurance Image courtesy of Kaboompics - Freepik

There are many incidents that can arise in a house. We always think of mishaps that cause extensive damage: a fire, a theft. But there are other incidents that …

At first, glance, if I talk to you about compensation for a domestic accident, you may not know what I’m referring to. If I relate it to home insurance, the range of possibilities that opens up is significant.

If you have taken a tour of the Internet, you will have read in the forums how badly insurance companies turn out. And possibly they are right.

Insurance companies are not an NGO, they seek to make a profit. Therefore, obtaining compensation for a domestic accident can be a daunting task.

The truth is that over a year, one in four insured households suffers a mishap.

The 5 mishaps at home that result in compensation for a domestic accident

There are many incidents that can arise in a house and there are many benefits that home insurance includes. We always think of mishaps that cause extensive damage: a fire, a theft. But there are other accidents that take the cake and of which you must be aware.

Obtaining compensation for a domestic accident can be a difficult task if when taking out the insurance you have thought that everything that happens is covered. A frequent mistake but not the only one.

The companies have provided themselves with repair services with which they substitute compensation for the provision of a service. With this, they intend to achieve at least two objectives: solve the problem of having to look for the professional on duty and, above all, reduce the amount of the claim.

For this, they need the client to allow them to use it, so it is up to you to decide between the service or compensation for a domestic accident.

According to insurers, these are the incidents they attend to most frequently.

1. Water damage, the most common incident

A water leak, a leak, or a flood in your home, in addition to being an inconvenience, can also become a headache. For insurance, water damage is the event that accumulates the most number of claims.

Many of them are due to the lack of quality of the house, to the age of the facilities, if not to an oversight. According to the report We Are Safe, in 2016, insurers handled nearly 2.3 million water damage claims. By themselves, they represent a remarkable figure to which many others caused by rain should be added.

Within water damage, these are the most frequent types of mishaps assumed by insurers.

1.1 Water leaks

From the tap that is left open to the water leaking from a pipe, water leaks are the most frequent incident and many times, problematic and expensive to solve.

Most insurers include, along with repairing the damage, locating and repairing the water fault that causes them.

But be careful because they usually exclude everything that smells like maintenance. Thus, many policies exclude the repairs of visible pipes, of installations that present a notorious state of corrosion or neglect. And also the damage that these breakdowns have caused.

When the cause of the damage is not on the premises of your home, your insurer will postpone dealing with the damage until the community or the neighbor repair the fault.

1.2 Atmospheric phenomena

Almost all insurers include damage caused by atmospheric phenomena in their policies. These include damage from leaks or leaks of rainwater.

But there are many that put as a condition to address the damage, that the rainfall exceeds 40 liters per square meter and hour.

Some companies are adopting this condition and accept lower intensities as long as the rain has caused noticeable damage in other nearby homes with similar construction characteristics.

The poor condition of the cover or the damage caused by water seepage through doors and windows are also grounds for exclusion for insurance.

1.3 Civil liability for water damage

According to the estimates of the insurance employer, every 5 minutes there is water damage to a third party. And it is usually due to the fact that we have forgotten to turn off the tap, lack of maintenance, a blockage, or ruptured evacuation pipes.

But in these types of mishaps, as important as the origin of the breakdown, is the relationship between the person causing it and the home insurance. For this reason, it is convenient for you to assess what it may cost you not to have family responsibility contracted in your home insurance.

2. Glass breakage, a growing fracture

Claims for breakage of glass have been growing proportionally to how the guarantee has been extended. Today the vast majority of insurers cover mirrors and fixed glass, sanitary ware, or cooktops. Therefore the exclusions have been reduced to crystal lamps and glassware.

Besides this, there are some limitations. In the case of the cooktop, the benefit is reduced to replacing the glass or compensating you for it if the hob is not manufactured.

Obsolescence is a factor to bear in mind because insurers do not offer cosmetic damage to the guarantee. For example, if the toilet model is not manufactured, you will have to settle for a similar one or pay out of pocket to replace the rest of the bathroom parts.

3. From DIY to family assistance, it is home assistance services

Home care benefits have climbed to third place in the rankings. There are already more than one million assistances registered by insurers in 2016.

It is a guarantee that does not generate compensation for a domestic accident but rather the provision of a service. Insurers make available to the client a series of urgent repair services in fire, explosion, flood, or theft claims.

In other cases, where there is no coverage by the policy, the insurer puts you in contact with the professional. For example, among the most common is the urgent locksmith to open the door because we have left the key inside or the lock has broken due to wear. Plumbers, electricians, masons, glaziers are some of the professionals included in-home assistance.

To these basic benefits, many companies have added home appliance repair or DIY assistance services. Most also have a computer, legal, or family assistance in the event of an accident at home.

Of course, to receive the service you must necessarily contact the insurer through the helpline. Also, some services are limited to a specified number per year or a maximum of labor hours.

4. Electrical damage, a controlled short circuit

Electrical damage already accounts for about 15% of the total claims that insurers deal with a home. As you can see, it is the fourth cause that can lead to compensation for a domestic accident. Year after year they increase in number in the same way that we have increased the number of electrical appliances at home.

Electrical damage is understood to be those related to electricity. They are usually caused by voltage surges or drops, short circuits, abnormal currents, electrical faults, or those caused by lightning strikes.

The age of the devices or the operating time also favors the appearance of breakdowns. Thus, for example, the largest number of complaints is concentrated in refrigerators, Vitro ceramic, and televisions.

5. The friends of others, a butron for insurance companies

Theft ranks as the fifth cause in the number of claims but rises to second place in terms of the amount of compensation paid. A butron for insurers, for which they lose about 850,000 dollars a day in compensation, according to the sector’s employers’ association.

Although these numbers do not differentiate if the damages are due to theft or theft, you should know what each thing is to avoid errors. Insurers are very clear about it and distinguish it in their contracts.

In both cases the conclusion is the same: thieves take your goods. The way they do it is what distinguishes each of the actions:

  • Theft : Taking possession of other people’s things, using violence or intimidation on people or force in things.
  • Theft : Taking the goods against the will of the owner without any of the circumstances that characterize the theft.

In the market, you will find a wide catalog of products that incorporate the theft guarantee. Even different variants in the offer of the same insurer.

Although theft and damage caused in the attempt are part of the basic coverage, theft usually only covers it if it occurs inside the home.

When the abduction occurs on the street, we can speak of a robbery outside the home. And in this case, they normally have to attend to be covered, the same circumstances as in the theft. Bad business if the loss is due to carelessness or the action of a pickpocket.

Before contracting this coverage, it requires that you make a detailed analysis of the conditions and limitations imposed by the insurer.

One cause for concern: personal accidents

So far we have seen the most frequent mishaps that lead to compensation for domestic accidents. But I cannot let it pass that 80% of these accidents are suffered by people who live in the home. Hence, more and more insurers include accident coverage in home insurance.

It is in our home where we feel safest but we must also be cautious in certain situations. It is a fact that it is where we spend the most time and therefore the greatest risk of suffering an accident. Thus, the groups that suffer the most are children under 5 years of age and adults over 65. The kitchen and the bedroom are the most conflictive scenarios and where the greatest number of accidents are recorded.

Falls and bumps are the most frequent causes of personal accidents. But you should not lose sight of cuts and wounds, poisonings, burns, choking or suffocation, and electrocutions. Between all of them, they account for about 60% of personal accidents.

But I do not want to end this article dedicated to the most frequent incidents that give rise to compensation for a domestic accident, without telling you some curiosities.

Curious fact: about 14.3 million homes do not declare any claim per year. But there are 75,500 insurances that accumulate five or more claims a year, 10% of all declared mishaps.

What group are you in?

What type of incident is the most frequent in your home?
Now it’s your turn! Leave us your answer in the comments.

The insurance company has raised the price of the insurance without notifying me

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You check the bank account and, surprise! They have raised the price of your insurance without warning

You check the bank account and, surprise! They have raised the price of your insurance without warning. It is time to ask for explanations and to ask yourself …

I am sure that if you have come this far it is because you have caught a good rebound with your insurance company. And the cause is that the price of insurance has gone up.

You bought the insurance a year ago at a good price and, at this time you have not had any incidents, so why change your insurance? You also think: the renovation company will notify me and tell me how much it will cost.

But suddenly you check the bank account or the credit card and… SURPRISE! insurance has raised an “egg”, and what is worse, without notifying you of the rise.

It is the moment in which the questions and calls to the insurance company begin asking for explanations. If you can talk to her, she will excuse herself saying that she has acted according to the contract you signed and that now you can no longer cancel the insurance, if it was your intention, because you are out of time.

Some readers have already expressed themselves in the pages of this blog in situations of helplessness and abuse of power of the insurer. I invite you to continue leaving your comments at the end of the article.

But all is not lost and since I don’t want you to have doubts about what your rights are, in this post I am going to tell you everything you need to know.

Can the insurance company raise the price of insurance without notifying me?

Yes. The answer is YES. In the same way that bread, fruit, telephone, or electricity go up, the price of insurance also goes up.

We are in a country of free competition – at least that is what they sell us – where it is the market that establishes what the products and services cost. Well, in the case of insurers, they must also comply with what the law establishes.

Article 25.3 of the revised text of the Law on the organization and supervision of private insurance, refers to premium rates, establishing, on the one hand, that they must be sufficient to satisfy all the obligations derived from the insurance contracts. And on the other, that they will do so in a regime of free competition in the insurance market.

According to this, the law only establishes, within the principle of the sufficiency of the premium, the minimum amount that the insurer must charge to respond to the commitments it has acquired.

An insurance contract is a commitment made by the insurer to pay compensation or provide a service in exchange for charging a premium.

Operating under a free competition regime means that insurance rates do not have to be authorized by the administration, nor sent to the DGSFP for review unless they are required in order to verify that they meet the technical requirements.

Ultimately, insurance companies can raise or lower the price of insurance, depending on the economic results.

However, this freedom of insurers to modify the premium must meet a series of requirements for what the price of the insurance implies within the contract itself.

What role does price play in the insurance contract?

The price of insurance plays a fundamental role in the contract. But I am not referring to the amount but to the relationship, it has within the insurance.

An insurance contract is a commitment made by the insurer to pay compensation or provide a service in exchange for charging a premium. This is established in article 1 of the Insurance Contract Law, therefore the price is an essential element of the insurance contract. Any modification that the contract undergoes, for this reason, implies a contractual modification that you must expressly accept.

But what is more, the acceptance by the parties of the modification of the insurance price must be formalized in writing, in the policy itself, or in a document attached to it.

So, should the insurer always communicate the renewal of the insurance to the policyholder?

Well NO, you shouldn’t always. There are certain cases that will modify the price of the insurance upon renewal, in which the company will not be obliged to inform the policyholder.

These assumptions are specified in two situations, when the renewal of the premium is provided for in the contract and when it is not. I tell you in detail.

The renewal of the premium is provided for in the insurance contract.

In this case, the insurer does not have to communicate the new insurance price in advance of the renewal.

I always recommend that you read the policy to know what we are signing and the terms in which we do it. These are some cases that usually appear in the contract for which the insurer will not inform you if the price of the insurance increases.

The accident rate

This is one of the reasons why insurance goes up more often. And it does not matter if it is a car or damage policy. Many insurers include in the policy the clauses that determine the increase in the price of the insurance according to the number of claims you have during the annuity or their amount.

Depending on the company, the price of the insurance can double and they could even cancel the contract.

When the increase experienced by your policy is due to the fact that you have had claims, the company would only be obliged to inform you if, in addition, it has modified the rate premium.

Promotions or commercial discounts

There are many insurers to attract customers to apply commercial discounts on their policies that last a certain period of time. These discounts do not modify the insurance premium, although its final price does.

In other cases, especially in health insurance, companies offer promotions in which you will not pay anything or only a part of the premium during the first 3 months. The following year, you will have to pay the 12 months at the agreed price and even increased by the IPC

CPI rise

If the Consumer Price Index (CPI) goes up, your insurance can too. The CPI is the increase in goods and services between two determined periods of time. The insurance benefits are based on the payment of compensation for the value of the goods or the provision of a service. Therefore, there are insurers that protect themselves from these increases by including in their contracts a clause to review the price of insurance according to the increase in the CPI.

Above all, it is the insurers that market health, death, or damage insurance that include these types of conditions.

Increase in rates and taxes on insurance

It is not frequent that it happens but sometimes it happens that the government of the day modifies the taxes or surcharges of the insurance contract. When this happens, the price of the insurance increases, but the insurance conditions do not change.

These are the most frequent reasons for insurers to include renewal conditions in their contracts and thus avoid the duty to inform in advance. The policyholder in this case does not have to accept the new conditions as they accepted them at the time of contracting the insurance.

The reasons that modify the price of the insurance are not foreseen in the renewal of the contract.

In this case, the policyholder must accept the new conditions as provided in article 5 of the Insurance Contract Law (LCS).

If the insurer intends to increase the premium and the contract does not contemplate it, then it is obliged to inform the policyholder two months before the renewal.

In the event that the insured does not accept the increase in the price of the insurance, the company may refuse to extend the contract, which may not be terminated until expiration.

It may also happen that the insurer fails to comply with the notification period or that it does so in such a way that the client does not have proof of the modification, in which case it must respect the premium of the previous annuity or it will accept the termination of the contract.

What can you do if the insurance price goes up?

Insurers are free to set the price of the insurance, which should be sufficient to allow them to meet the commitments assumed. But this freedom is subject to a series of rules that they must comply with.

If it happens to you that the company raises your insurance without notifying you, the first thing you have to do is review the conditions of the policy. With this, you can check if the increase corresponds to any of the renewal conditions. In that case, the fact that the company has not notified you in time does not allow you to cancel the contract without notification and after the deadline.

Some insurers camouflage in assumptions included in the contract other increases that have nothing to do with it and do not inform the insured. In that case, you will have to give your express consent to the new conditions.

When the company decides to raise the price of the insurance and informs you before two months of expiration, you will have a period of 15 days to communicate the acceptance or objections to the new conditions. If you do not ask for cancellation but you oppose the insurance company’s proposal, it may terminate the contract upon expiration.

Different is when you do not communicate the renewal or do it at the wrong time. In that case, you can claim that you respect the premium for the previous period or cancel the insurance. To solve your doubts about how to do it, I advise you to download this guide How to cancel insurance efficiently. In this article, you have other alternative solutions 3 Tricks to cancel the insurance and not claim the receipt.

Now it is your turn to leave your complaints or the answer to this question in the comments.

How have you acted when the price of your insurance was raised without warning?

What is mandatory travel insurance and what does it cover?

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mandatory traveler insurance Image courtesy of Pixabay

It may have become routine for you. You accompany the kids to the bus that takes them to school and then you go to the nearest station to catch the subway that will take you to work. Perhaps at some point, you have read on the ticket that the journey is covered by mandatory passenger insurance.

The usual thing is for the displacement to proceed normally, but what would happen if when you went out onto the platform, you slipped because there was water and you sprained your wrist? Who pays you for the days you have been sick?

For now, you have to know that the carrier is required by law to take out mandatory passenger insurance.

In this article, you can read, while you make the trip, all the information you need to make it more peaceful.

What is SOV, compulsory travel insurance?

It is accident insurance, the purpose of which is to compensate passengers when they suffer personal injury or injury while traveling on public transport.

When purchasing the ticket, you also contract the insurance that is included. You are insured when at the time of the accident you are provided with the title of transport, either paid or free.

It is convenient that you keep the ticket until the end of the trip in case you have to claim for an accident.

Who does the insurance cover?

The following are insured:

  1. Any person who at the time of the accident is provided with the title of transport, paid or free. When the transport ticket is issued without requiring the traveler’s identification, it will be presumed that the injured person will be provided with a ticket in all those cases in which the loss or destruction of the said ticket is likely due to the characteristics of the accident.
  2. Minor users are also protected who, according to the rules that regulate each means of transport, are exempt from paying tickets or passage.
  3. Also insured are the personnel dedicated by the transport company to the services required for the use or operation of the vehicle, as well as the personnel at the service of the Public Administrations who are, during the trip, in the exercise of their functions.

What public transport must include mandatory passenger insurance?

Passenger transports carried out in vehicles with a capacity equal to or greater than nine seats, which circulate on all kinds of urban and interurban roads and are public in nature, even if carried out by private means, need to have mandatory passenger insurance. Therefore, buses, tram, metro, or train are required to have an SOV.

The trolleybus, cable car, funiculars, ski lift, chair lifts, gondolas, or other means in which traction is done by cable and in which there is no fixed rolling path are also included, even if their capacity is less than 9 people.

What does the compulsory traveler insurance cover?

Accidents that travelers may suffer on all national and international trips, and that occur while using the means of transport are covered. Also included are those caused by going up and down or during the delivery and collection of luggage.

Insurance protects bodily injury and the consequences that result from it. The insured or beneficiary will be entitled to compensation when, as a consequence of a covered accident, the following occurs:

The death of the insured

The beneficiaries will have the right to receive a single compensation if the death occurs during the eighteen months following the date of the accident and whenever it is a direct consequence of it.

The amount of compensation in the event of death will be 36,060.73 dollars.

Bodily injury

Bodily injuries that cause permanent impairment will be classified, according to the category to which they belong, within the fourteen included in the scale of compensation included in the law.

If they were not explicitly included, they will be equated with one of the categories, depending on the physiological deficit produced by the accident and as established by the criteria of the optional medical report.

Compensation for temporary disability is not governed by the healing time of the injury. They are valued by the degree of disqualification attributed to them on the scale included in the law. Thus, for example, you will charge the same amount for a femur fracture that takes 100 days to heal as if it does 250.

The compensations that may correspond to you range from 42,070.85 dollars in the first category to 1,202.02 dollars in the fourteenth.

Healthcare

The assistance guaranteed by the Compulsory Travel Insurance extends, as a maximum limit, up to seventy-two hours after the moment of the accident, in the case of injuries that do not require hospitalization of the insured or specialized outpatient treatment. It is extended up to ten days when the insured has it covered by other compulsory insurance, and up to ninety days in other cases.

What does Mandatory Travel Insurance not cover?

The mandatory passenger insurance does not cover property damage. This does not mean that if you suffer them you cannot claim them, but you will have to do it to the cause of the accident and to the margin of this insurance.

A sudden stop of the bus in which you travel causes you to hit yourself hard. From the blow, you have a sprained wrist, a bruise on your face, and your glasses have been broken. You can only claim from the SOV for bodily harm, the rest will have to be requested from the circulation or civil liability insurance of the deceased.

What should I do in case of an accident in public transport?

First of all, you must make sure that you have a valid ticket for the trip in your possession.

Once this is done, the next step is to notify the transport company, the personnel who provide service in the environment where it has occurred, or whoever is in charge of the station, administration, or installation. There are many means of transport that have a claim form that you can fill out immediately after the accident.

Next, you or your beneficiaries will have to prove the bodily harm suffered, providing the corresponding medical reports.

As with other insurances, in the event that the transport company does not have insurance, the Insurance Compensation Consortium will be responsible for the claim.

Is compensation for SOV incompatible with other insurance?

The Mandatory Travel Insurance, due to its nature and coverage, its indemnities are compatible with those of other mandatory insurance. The key is that it is accident insurance, where the risk covered is the person of the traveler. Therefore the right of the insured does not arise from the responsibility of the transport company for a faulty action.

This means that in the event of an accident, in addition to claiming compensation from the mandatory passenger insurance, you can also do so against the civil liability insurance of the cause of the accident.

conclusion

The SOV provides for the right of travelers to be compensated for bodily harm suffered in an accident that takes place on the occasion of a trip in the means of transport and is granted to any traveler who at the time of the accident is provided with the transport certificate.

In summary, you have the right to be compensated “whenever the objective fact of the accident or damage occurs, regardless of the fault or negligence of the driver, employer, or employees, and even third parties, up to the limit and under the conditions established in the same ”, and provided that the damages do not derive from any of the exclusion causes provided.

Finally, after this, I hope it has become clear to you that mandatory travel insurance differs a lot from travel insurance.

It’s your turn. Tell us in the comments if you travel safely by answering this question.

Do you activate the insurance coverage by validating the ticket before starting the trip?

Dying is a problem that you can’t solve with death insurance

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Dying is a problem, especially if you are the protagonist, it is also expensive even if you have a death insurance

Dying is a problem, especially if you are the protagonist, as well as being expensive even if you have death insurance.

Adding up the cost of the funeral home, the coffin, the car, the flowers, the cremation, or the burial, the price is put at a peak.

The number of deaths in the country was 423,643, 3.17% more than the previous year. The result of a simple multiplication tells us that the business of death has a turnover of around 1,500 million dollars. A very attractive cake that is divided between four, in an opaque and monopolistic way.

In the same period of time, the insurance employer, confirms that the insurers attended the burial of 255,000 people. This means that 60% of all burials have been attended to under death insurance.

If you have gone through the trance of losing a loved one, you will know that it is a very delicate moment, in which you are not for anyone, much less to think that they can tease you.

I have decided to write this post, although I have to confess that the subject displeases me and deeply irritates me, to discover some secrets that surround this business.

Expensive and opaque funeral services

Three years ago I published the article What is the price of dying? To prepare, investigate whether the web pages of the most important funeral homes reported the price of their services. The result was devastating, I found no results. To write this post, I have repeated the search and the result has been the same. None of the funeral homes consulted has their prices available on the Internet.

This lack of transparency makes it difficult for the consumer to analyze the different alternatives they have. You have to go to the funeral homes in your city to get a budget, surely unclear, and that you may not be able to compare due to lack of competition.

Funeral services were completely liberalized in 1996, since then they are in the hands of private or mixed companies in which some municipalities still participate. Not even in these public participation companies, it is possible to access the rates for the services they provide.

Thus, depending on where you live, the burial will cost you and the difference can be significant.

This difference in price is often justified in the cost of the cemetery. We will see later that, although it is true that it exists, it is not always the reason.

How much does a dignified but simple funeral cost?

When it comes to knowing how much burial costs, it is necessary to distinguish between what is the funeral service and the burial. The most used practice continues to be a burial, although cremation is gradually gaining ground.

So that you can assess the economic scope of dying, in this list you have most of the elements that the funeral service includes.

The coffin

It is one of the most expensive sections. Its price, for a normal model, no-frills, ranges between 800 dollars and 2,500 dollars, although the average is 1,200 dollars.

The wake

Renting the funeral home for 24 hours, sometimes lasts up to 36 hours, costs just over 600 dollars. If you want to save on the price, you can organize a simple farewell, without a wake, or watch it at home.

The hearse

It has an average cost of around 500 dollars. This price may vary depending on the transfers you have to do until the funeral. Funeral homes usually offer escort cars for family members that, as you can guess, also add to the bill.

Florist, reminders, signature books, live music

These are some of the many services that you will have at your disposal if you want to spend more. For example, a flower crown does not usually go below 100 dollars.

The mass

The religious service has an average cost of 60 dollars, that of “the will” has become a fee that depends on where it is performed, how and even the type of confession you profess.

The paperwork

The medical death certificate, the inscription in the Civil Registry (which must be done within 24 hours after death) and the municipal burial license are going to take another 200 dollars if the funeral home is in charge of making them. This amount can vary a lot, depending on the municipality, since each one charges a different burial fee.

The price of the cemetery

A good part of the bill that you have to pay for the dead goes to the cemetery. By tradition and to preserve their memory, we bid farewell to the deceased by burial in a niche or grave in the chosen municipal or private cemetery.

The cemetery service is broken down into two concepts: the burial service and the cost of the niche or grave. But it will depend on the town hall on duty that you have to pay extra fees for other additional services.

But it is also significant that the price disparity in the burial service according to which municipality.

How to lower the price of a funeral?

There are other alternatives to make the burial price more affordable, some are only small changes from what we have seen, others are given by necessity.

Let’s see what there is.

Incineration.

It is the alternative to burial. More and more people are opting for cremation, especially in cities. The average price is around 600 dollars \, to which you have to add the corresponding to the urn in which to put the ashes.

Of course, with cremation, if you take the ashes home, you will save the burial expenses, the niche or grave, and the tombstone. But if you plan to have them in a columbarium (where to deposit the ashes) you can start to add at least another 300 dollars for a 10-year rental.

Incineration is a cheaper alternative to burial, as long as you don’t go overboard with where to deposit the ashes.

Donate the body for scientific research.

With this formula, the burial will be free. The body will be used in medical schools for teaching students or for research and development of new procedures in medina and surgery.

The donation must be made in life voluntarily and the relatives or friends know it so that when the time comes they can make it. Once accepted, the receiving center or university will bear the costs of moving the body in addition to the burial or incineration after its use.

Don’t pay because you can’t or don’t want to.

Sometimes the expense of death becomes unaffordable for their immediate family members. When this happens, social services or other people can take charge of the expenses that they can later claim against the deceased’s inheritance. In some municipalities, there are free services capable of assuming the costs of death.

Have death insurance.

This is the option that more than 20 million consumers in this country have chosen when subscribing to death insurance.

With death insurance, the deceased is assured that they will have the funeral service covered and the peace of mind that family members will not have to deal with these matters at such a delicate time.

But the convenience of insurance should not hide its drawbacks.

If I buy death insurance, do I save money?

Death insurance is undoubtedly a form of savings, at least it does allow you not to have to make an outlay at that time.

But in death or funeral insurance, the age of hire or the place of residence play an important role. The price of the insurance is established based on these factors, to which you will have to add the extra coverage you hire.

With the calculator in hand, when the time comes, you will have paid more insurance than the insured capital.

I have checked some of the products that the first death insurers have on the market.

unless you have the misfortune to die in the first years of the contract, you will pay more than you insure. Ah! And if you cancel the insurance, you will lose everything you paid until then.

If I already have death insurance, should I keep it?

If you already have contracted death insurance, and reading this article makes you wonder if you are interested in continuing with it, the first thing to keep in mind is how old you are, how long it has been since you contracted it, and the type of premium that you have hired.

The examples in the table above are calculated at a natural premium (increasing) where you pay more as you age. In this case, I would seriously consider canceling it. Returning to the example, the person of 65 will start paying about 15 dollars per month to end up paying, if expectations are met, about 25 dollars per month.

In the event that your policy is paid with a level (constant) premium, as long as you do not extend the coverage, you will always pay the same. At first, the risk of death is low and the premiums too, but as the years go by, both grow proportionally. In this case, the more years that have passed since you took out death insurance and the older thongs, the less you are interested in doing without it.

I would only keep the insurance if I am over 70 years old or without having fulfilled them, I have paid the policy for more than 25 years.

Clear things, avoid mistakes

You have room to lower the price of a funeral, it is a matter of not letting yourself be overwhelmed by the funeral home advisor and selecting those services that you really believe are worthwhile. It is in those objects or services that do not have a fixed price that you can get significant savings without losing the funeral dignity and solemnity.

It is best to be clear from the beginning. Leave in writing or inform your relatives what you want them to do with you when you are gone. And based on this, if you have the ability to save, leave the money so that they can satisfy your will.

If you are not very demanding and you doubt whether you will be able to keep saving without touching it until the end, you can always take out a single premium death insurance. You will pay more insurance than the capital contracted, but it will be enough to cover the cost of a decent burial.

After this, at least some things have become clear to me:

  • Dying is expensive, as well as being a chore.
  • Before choosing, you must find out the prices that the funeral home charges you for its services.
  • Choose the necessary services and not all those that they offer you.
  • Death insurance is expensive and not profitable to purchase.
  • Saving a part of what you pay for insurance is enough to have a funeral to suit you.
  • purchasing life insurance is another good alternative.

In spite of everything, funeral homes will continue to make their fortune, sharing the cake without competition and insurance companies will continue to do their thing, making a lot of money with death insurance (or funerals, as you like)

Now it’s up to you to answer this question and tell us about your experience.

Do you know of any other way to make a funeral cheaper that can help people?

VAT in the insurance contract

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Every time you buy something, you are paying VAT. There are activities that are exempt from the tax

Every time you buy something, from the moment you get up until you go to bed, you are paying VAT. We pay VAT on almost everything we buy. You pay for the purchase of a chicken, for the refrigerator where to keep it, or for the electricity it needs to operate. Also for the services of the electrician who has put the plug you need to connect to the light.

Of the few activities that are free, in part, from the Value Added Tax (VAT) is insurance. Despite the fact that it is a tax that has lived among us for years, there are still many doubts about VAT in the insurance contract.

To clarify all these doubts is this article in which you will find all the information about VAT in the insurance contract.

Does insurance have VAT?

Well, according to article 20 of Law 37/1992 on Value Added Tax, insurance, reinsurance, and capitalization operations are considered “exempt”. Therefore, the answer to the question of whether insurance has VAT is no. By subscribing to an insurance policy you will not pay VAT, nor will you have to do mediation services.

The fact that insurance is not subject to VAT does not mean that it does not have other associated taxes and fees.

What taxes does the insurance contract have?

If you take a look at any of your insurance receipts, no matter one mode or another, you will see that in the breakdown of the price there is a chapter referring to taxes. And when I refer to taxes it is because there are several. Depending on the modality in question, the insurance will have two or more taxes or fees. Let’s see it.

The Insurance Premium Tax (IPS)

It is an indirect tax, established in 1997, and applied to certain types of insurance. The IPS taxes the net insurance premium at 6%, that is, the price of the insurance without taxes or surcharges of any kind.

It is a tax that affects most of the contracted insurance, but it has its exceptions. What insurance do IPS not pay? As the list is not very long, these are the exempt modalities.

  • Health and sickness insurance.
  • Operations relating to compulsory social insurance and group insurance that implement alternative systems to pension plans and funds.
  • The life insurance pure
  • Export credit or surety insurance contracts.
  • Agricultural insurance.
  • Insurance contracts related to international passenger and freight transport operations.
  • Insurance-related to ships or aircraft destined for international transport.

The Surcharge of the Insurance Compensation Consortium

The CCS is the public body that covers certain exceptional risks not assumed by the private insurance sector.

The assets of the Consortium are exclusive, being financed with the premiums and surcharges that it collects through the insurance operations carried out by the insurers themselves.

Three types of surcharges apply depending on the different types of insurance.

Surcharge for Extraordinary Risk Insurance, damage to property, people (life and accidents), and loss of benefits.

For example, it deals with the damage caused by earthquakes, floods, and other natural catastrophes. In order to meet the indemnities derived from these risks, the CCS is financed through a surcharge applies to each insurance operation, whether it is life or non-life insurance.

Thus, for example, you will pay the surcharge on the car, home, community, or industry insurance that you hire. You will also do it when contracting personal insurance, both in the life branch in individual and group policies that exclusively or mainly guarantee the risk of death, including those that include guarantees for permanent disability.

In non-life insurance, the surcharge is mandatory in accident policies or those that guarantee compensation in the event of death or permanent disability.

Surcharge in Obligatory Subscription Civil Liability Insurance derived from the Use and Circulation of Motor Vehicles

Another coverage provided by the CCS is damage caused by uninsured or stolen vehicles. For this purpose, the surcharge is set at 1.5% of the net premium corresponding to the compulsory civil liability insurance of your car insurance policy.

Surcharge for the liquidation of insurance companies.

This is a surcharge that is levied at 0.15% on the net insurance premiums made on risks. The objective is to guarantee all policyholders their insurance coverage in the event that the insurer has financial problems. If this happens, the body in charge of the liquidation of the company. It will be in charge of meeting the commitments with the insured, injured parties, employees, or suppliers.

Surcharge for fractioning payment of the insurance price.

Whether or not to pay this surcharge is up to you and the chosen insurer.

There are many insurers that, to facilitate the payment of the insurance, admit its fractionation by months, quarters or semesters. Some have even established other 90-day payment formulas. This form of financing is not free, although the cost depends on each company.

The CCS surcharge is normally paid in the case of split insurance, in the first fraction. But you can pay it in installments like the main receipt. If you do, the CCS will charge you interest for it, which ranges from 2% of the semi-annual payment to 3.5% in case of splitting it by months.

How does VAT affect me in the insurance contract?

We have seen that insurance is not taxed by VAT, but that does not mean that it is not affected by it. In fact, any variation in the tax can affect what you pay for your insurance policy. If the VAT goes up, the repairs or services provided by the insurer also do so, so the insurance costs will increase.

But in addition to this increase in the price of insurance, in the event of a claim, you may also be forced to pay the tax. Do you want to know when?

What impact does VAT have on car insurance?

The car insurance is no exception and its price does not include VAT, but after an accident repairs itself carrying IVA.

The normal thing is that it is the insurer who takes charge of the payment of the tax when paying the repair of the damages. But this is not always the case, as happens when a policyholder is a legal person or the vehicle is involved in business activity.

When the vehicle belongs to a company, insurers avoid paying VAT by being able to deduct it on their tax returns. In these cases, the insurer will pay the workshop or supplier the taxable amount of the invoice, while the amount of the tax will be on your account.

If your policy is fully comprehensive with excess, you are an individual and the use of the car is private, the amount of the excess must be deducted from the total amount of the invoice. But if you are a company, in addition to paying the full amount of VAT, you will also have to pay the amount corresponding to the franchise.

There are some insurers on the market that take charge of VAT on repairs by paying an extra premium on the price of insurance.

It is convenient that before accepting the insurance contract, you review the conditions because each insurer has its own criteria.

What about VAT on damage insurance?

In damage insurance (home, business, communities, business, etc …) something similar happens in car insurance. You do not have to pay VAT on the price of the insurance and neither in the repairs of the goods for private use.

Different is when the goods are related to a commercial or business activity. Thus, for example, you could pay VAT on repairs in homes for rent made by home insurance.

As you can see in this case, not only the insurer can take into account, when paying VAT for the repair, the condition of the policyholder but also the activity of the goods affected in the loss.

When assessing the extent of the damage, some insurers include the amount of VAT in the compensation, knowing that the policyholder cannot deduct it. In contrast, there are still many who delay their payment until the policyholder presents the repair invoice.

How does VAT affect people’s insurance?

Fundamentally, within the insurance for people are health, life, or death insurance. For none of them, you will have to pay VAT, in the price of the insurance and not in the benefits you receive from them.

Medical services and acts are exempt from VAT tax, certain pharmaceutical products are not, but if they are covered by your insurance policy, it will be the insurer who will take care of it.

In the case of funeral insurance, you will not have to pay anything for the VAT with which funeral services are taxed and which varies between 10 and 21% depending on which service it is.

conclusion

Insurance operations are exempt from paying for Value Added Tax, VAT. So are mediation services.

But the same does not happen with the deliveries of goods and services made under the coverage of the policy. In summary:

  • You do not pay VAT in the insurance contract, whatever the modality. You will pay for other taxes and surcharges but not for VAT.
  • You will not pay VAT on repairs when you are a natural person and the property is not intended for commercial activity. 
  • You will pay VAT when the policyholder is a legal entity and can deduct it in their tax returns.
  • You will not pay VAT when you have agreed with your insurer in the insurance contract. 

As you have seen, no insurance has VAT in Spain, however, what you pay for it is directly affected by the VAT incurred by the repairs or services provided at your expense.

Have you ever had to pay VAT on the repair because the insurance company did not pay it?

Leave your answer in the comments.

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