Insuring your car

If you are visiting Spain, either for a short or extended stay, and you are still on tourist status and driving your foreign-registered car, all the auto insurance you need is the coverage by your insurance company in your home country, extended to cover travel in Spain.

Your own company can issue you a “green card”, as the international insurance certificate is popularly known. If you are from an EU country, you no longer need to present this to the Spanish border officials when you enter, but it is still a good idea to have it even if there are no longer any border guards at all, because some insurance companies limit their coverage to the legal minimum outside their own national borders, unless the policy holder has arranged for his green card.

Spanish Cars

Let’s suppose that you have just purchased your Spanish car, on tourist plates or on normal Spanish registration, new or secondhand. The dealer who sells it to you will either have an insurance company representative as part of his organisation or will be happy to steer you to his brother-in-law who sells auto insurance. His brother-in-law’s company may be fine, but it also pays to shop around, or at least ask among other foreign residents in your area to recommend a company.

If you are buying a new car on instalments, you may have little choice in what insurance you want. The dealer usually requires you to have full-coverage insurance on the car until it is paid off.

For a small car, this all-risk - todo riesgo - insurance will cost you between €1,200 and €1,800, depending on whether you are an excitable young man or a prudent woman of mature years.

These personal details are factored into your premium as insurance companies become more sophisticated. On the other hand, you can drive legally for as little as €400 a year, or even less, with a 50 per cent discount as a no-claims bonus. This price will cover the obligatory insurance, required by Spanish law. It now covers you for claims by third parties up to the amount of €360,000 for bodily harm and €100,000 for damages.

A “third party” is anyone who makes a claim against you for injury or damage caused by your car. It includes driver and passengers in another car with which you may collide. It may include even passengers in your own car who are not members of your family. It includes pedestrians, and the owners of any property you may damage. If you drive your car into someone’s wall and knock it down, the wall’s owner can make a claim against you.

This minimum insurance does not cover you or your car at ~a1l. It covers only other persons and their property, and only up to the limits above. This coverage is the legal minimum.

If you are injured by a driver who has no insurance at all, the Spanish insurance consortium, which backs the entire industry, will pay out amounts up to these limits. The Spanish limits used to be even lower but they are gradually being raised. This of course means a corresponding rise in premiums.

If you want further coverage, you can take out additional insurance, and most people do. For a few hundred euros more, you can get the same third-party coverage, but up to much higher sums or even unlimited, which means no ceiling on what the company will pay in the case of a terrible accident with very high claims.

You can choose just what you need to insure - yourself and your family, for example, who do not count as third parties, or your shiny new car. You can buy coverage against theft, fire, damage, death or injury, and even insurance to pay for legal costs involved in court proceedings brought against you or which you have to bring against another driver when claiming damages. You can get comprehensive insurance covering all these or a policy covering only part.

Let’s look at a few possibilities. Total coverage can cost you €1,000 or more depending on the size and age of your car, but you can get quite a lot of protection by taking out a policy under which you yourself pay the first €200 or so of any small damage to your car. This is exemption is called a franquicia. Because you promise to pay this much, the company saves quite a lot of expense in administration and paperwork, and you get your major coverage more cheaply.

A typical policy might be one in which you pay the first €300 of any claim against you and you are insured for:

1. The full value of the car in cases of fire or accident.
2. Up to 80 per cent of its value in case of theft.
3. Coverage for you and your family in case of death or permanent injury.
4. Coverage of your legal expenses.
5. Unlimited coverage for third-party claims against you.

This should cost around €700 a year for a mid-sized car. Over the years you will get a discount on your premiums as a “noclaims bonus” if there are no claims against your policy

Finally, if your car is insured in Spain and you wish to drive it to an EU country, your Spanish insurance will cover you, but only for the legal minimum in each country so it is a good idea to take out a green card for your trip out of Spain. Some companies charge extra for the green cards. Others offer it as a free service.