Expat Landlords run Insurance Risk in Spain

Over 90% of British overseas property owners are under-insured, opening themselves to public liability challenges in UK courts after the Rome II legislation came into effect this month.

The regulation change particularly impacts European property owners where insurance cover for public liability in Europe is often at a very low level, with those renting their property at a particular risk, according to insurance company Tonic Underwriting.

It warned that if a UK national suffers an injury in a European property, and both owner and tenant live in Britain, than action can be brought in the UK where awards are historically higher and, as a result, often exceeds the level of cover provided by a local insurance company. This, the company suggested, is potentially damaging to the property owner and the reputation of an agent, if the client believes they should have been warned of this possibility when buying.

“In our experience we have seen the consequences of inadequate policies and Tonic was created to fill that gap,” said John Newman, chairman and chief executive of Tonic. “The liability cover for Spain and Portugal is often extremely low, frequently in the region of €100,000 to €160,000. This would leave a client very dangerously exposed as any meaningful claim would potentially exceed this limit. It is for this reason that Tonic provides £5million limit of indemnity.”

Story from OPP (registration required)

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