A surge in home insurance claim disputes is emerging in Spain, with consumers increasingly reporting denials of coverage or delays in settlements following household incidents. The trend, highlighted by the Navarra Consumers Association Irache, points to growing friction between policyholders and insurers, particularly concerning damage to homes.
According to Irache, a common complaint centers around insurers rejecting claims by arguing that the damage isn’t covered under the existing policy. The association notes that companies often attribute the issue to consumer responsibility, inadequate property maintenance, or the responsibility of the homeowner’s association. Critically, these justifications aren’t always adequately explained, and in some instances, are issued without a professional assessment of the damage. “These affirmations are not always adequately justified and, in some cases, have been given without even a surveyor from the insurance company visiting the home to verify the damage and the origin of the problem,” the association stated.
The issues aren’t limited to outright denials. Consumers are also reporting instances where insurers offer a settlement but require the homeowner to directly manage and finance the repairs. While seemingly a solution, this can create further complications. When insurers do take responsibility for repairs, significant delays are frequently encountered, with weeks or even months passing before technicians are dispatched.
Spanish regulations stipulate that insurers should pay out on claims once they’ve completed the necessary assessments. If more than 40 days have elapsed since the insurer was notified of the claim, they are obligated to pay at least the minimum amount potentially owed. Failure to meet this timeline or to fully settle the claim within three months without justification puts the insurer in default, potentially incurring additional financial penalties. However, navigating these regulations and enforcing these rights proves challenging for consumers.
Many homeowners, faced with urgent repair needs, opt to hire their own plumbers, carpenters, or contractors to resolve the issues quickly. However, when submitting invoices for these self-arranged repairs to their insurers, they often encounter resistance. Insurers are reportedly challenging the cost of the work, offering significantly lower settlements than the actual expenses incurred. This places consumers in a vulnerable position, as disputing the insurer’s valuation often requires commissioning an independent expert report – a costly and potentially complex undertaking, especially after a considerable time has passed since the initial damage.
seeking compensation for delays in repairs is proving difficult. Consumers are required to quantify and demonstrate the damages resulting from the delay, often necessitating legal action. This adds another layer of complexity and expense to an already frustrating process.
The rising number of disputes coincides with a broader trend of increasing scrutiny on insurance claim rejections globally. A report in the Financial Times highlighted a similar pattern in the UK, where the value of claims paid rose to £5.5 billion in the previous year, driven by climate-related events and rising construction costs. While the Spanish situation doesn’t explicitly cite climate change as a primary driver, the increasing frequency of extreme weather events in the region likely contributes to the overall rise in claims and, disputes.
The growing emphasis on Environmental, Social, and Governance (ESG) factors within the insurance industry, as noted in a report by Chambers and Partners, may also be indirectly influencing claim handling. Insurers are increasingly focused on assessing and mitigating climate-related risks, which could lead to more rigorous scrutiny of claims related to weather damage. The report indicates that ESG considerations are becoming a decisive factor in insurance litigation, particularly concerning directors’ and officers’ liability policies.
Irache is calling for greater regulatory oversight of insurance companies to ensure they fulfill their obligations and avoid leaving consumers without adequate support. The association’s concerns echo a broader need for clarity and transparency in the Spanish home insurance market, particularly for expatriates navigating a complex system of regulations, bank requirements, and landlord expectations. As highlighted by EFPG, home insurance in Spain offers predictability, allowing for quick resolution of problems, but only if the policy is understood and the claims process is navigated effectively. The current trend suggests that many consumers are finding that process increasingly challenging.
The situation underscores the importance of carefully reviewing policy terms and conditions, understanding the scope of coverage, and promptly reporting any incidents to the insurer. Consumers should also be prepared to document all damages thoroughly and seek professional advice if they encounter difficulties with their claims.
