Multi-Risk Home Insurance: What It Covers and Is It Mandatory?
Learn what multi-risk home insurance covers, when it's mandatory to have it, and how to effectively protect your home's contents in Portugal.
When buying a house, especially with a crédito habitação (home loan), you'll face the need to take out a multi-risk home insurance policy. This insurance is designed to protect the property against a range of risks that could damage the building's structure, ensuring the financial peace of mind of the owner and the lending institution.
Is it always mandatory?
Taking out multi-risk home insurance is mandatory by law for all buildings under a horizontal property regime (condominiums). This legal requirement aims to ensure that damage to one unit does not compromise the safety and value of the others. If you use a crédito habitação, the bank will always require this insurance as a condition for granting the loan, in order to safeguard the value of the asset serving as collateral.
What is included in the basic cover?
The basic cover of a multi-risk insurance policy typically protects the property against structural damage. This includes the walls, roof, and fixed installations of the building. The most common risks covered by the basic policy are fire, lightning strikes, explosion, storms, floods, and water damage. The main objective is to ensure that the capital invested in the building's construction is protected against serious unforeseen events.
And the home's contents?
Protecting the contents of the home—such as furniture, appliances, clothing, and other personal belongings—is an optional cover. The basic multi-risk insurance policy does not include your belongings by default. To protect them, you need to request extra contents cover, specifying an insured capital amount that corresponds to the replacement value of all your goods. It is crucial to make a thorough inventory to avoid being under-insured in the event of a claim.
Analysing different market proposals and carefully reading the general and specific conditions of each policy is a fundamental step. Exclusions and compensation limits vary between insurers. If doubts persist, speaking with a specialist can help clarify your options and ensure your home and belongings are properly protected.
