Home insurance in Portugal: the compulsory fire policy and multi-risk cover

The compulsory part: fire in condominium buildings

Article 1429.º of the Civil Code makes fire insurance of the building compulsory in horizontal property — each owner insures their unit, and the common parts are insured too. If owners fail to do so within the period and for the value set by the owners’ meeting, the administrator takes out the policy and recovers the premium from them. Most buildings hold a single condominium policy for the common parts; each flat’s own fire cover is usually the first layer of the owner’s multi-risk policy.

Detached houses have no legal obligation, unless a mortgage bank imposes one.

• Fire: compulsory for flats and common parts (Civil Code art. 1429.º)
• Multi-risk: required by mortgage lenders, naming the bank as beneficiary
• Earthquake: optional cover, worth adding in Lisbon, the Algarve and the Azores
• Tenants: a contents-and-liability policy from a few euros a month

Multi-risk: what is in it

A seguro multirriscos habitação covers the building (walls, fittings) and/or the contents (furniture, appliances, valuables) against fire, explosion, lightning, storms and floods, water damage from pipes, theft, glass breakage, electrical damage, and adds third-party liability as occupier or owner — the neighbour’s ceiling after your leak — and assistance (plumber, locksmith). Sums insured are set per section; under-insuring the building leads to proportional reductions at claim time, so the rebuilding value, not the market price, is the right figure. Seismic cover is an option in Portugal, priced by zone; given the country’s geology it is the one option we recommend every client take.

Mortgage banks require a multi-risk policy on the building for at least the reconstruction value, with the bank as beneficiary; they will offer their own group policy, and the borrower is free to buy an equivalent one elsewhere and present the certificate.

Tenants and landlords

A tenant is not obliged to insure, but is liable for damage caused to the landlord’s flat and to neighbours; a contents policy with liability cover costs little and many landlords ask for it. A landlord keeps the building policy (fire and structure) and, if the flat is let furnished, extends it to the contents. Short-term rental (alojamento local) operators need liability cover for guests under their licence conditions.

Claims

Notify the insurer within the contract’s deadline (usually eight days), keep the evidence, get the assistance service to stop the damage, and let the insurer’s expert assess before repairs — except emergency ones. Water damage between flats is the most common claim in Portuguese buildings; the condominium’s policy and the two owners’ policies decide who pays.

Questions