Spain Explained

Think twice before changing your home insurance

You have a tried and trusted home insurer and then you go into the bank one day and they point out how much you can save with their own insurance. What should you do? Think twice. We give our advice when it comes to taking up offers you think you can’t refuse.

We’ve all felt it at one time or another. The cost of insurance can mount up. Car, house, medical, life… the number of insurances we end up collecting over the years can come to a tidy total each month. If you choose the cheaper option of paying your insurance premium in an annual lump sum the loss of this from your bank account can make you wonder if there is an easier and cheaper way of safeguarding your assets.

It’s always wise to shop around and definitely, when it comes to insurance, very important to check the small print. You need to know exactly what you’re getting for your money as not all insurance policies are the same when it comes to what’s covered and for how much. Terms and conditions can get you every time, which is why it’s so important to think twice.

We can beat this

So, you’re in your bank or maybe they call you on the off chance. They’ve got an offer on home insurance that must surely beat your current provider. You check your payments, and yes, it’s correct. The premium for the bank’s insurer is less than what you’re currently paying. Stop. Before you sign on the dotted line there are some issues to consider.

Firstly, the bank already knew how much you were paying in home insurance. They shouldn’t really use this as it breaks data protection regulations, but they do. The fact is that they can see all your monthly outgoings and annual premiums. Nothing is secret here and once they know what you are paying, then they can make you an attractive offer.

Before making any hasty decisions, look carefully at the small print and, in some cases, not so small print. What exactly is being covered with this new insurance? Is it as comprehensive as your existing one or does it carry some major differences that could leave you high and dry when making a claim?

It is unlikely that the bank’s insurers will have undercut the premium of your present provider at a loss for themselves. Much more likely is that you are getting a cheaper offer but with less favourable conditions if you should need to claim. And after all, covering yourself effectively is what insurance is all about.

Insurance companies you can trust?

The insurance company that is being promoted by the bank to replace your existing insurer is unlikely to be a completely independent entity. It’s often the case that the insurance company themselves, although a third party, has been set up by the bank. So, although it isn’t the bank itself that is insuring you, they have a strong vested interest in you swapping over.

Changing over – a simple process- for now

You can bet that the bank will be only too happy to do the paperwork to setup your new insurance in-branch, even offering to “cancel” with your existing insurer.

All too often though, the bank’s version of “cancelling” your existing policy is to simply block the direct debit – not exactly the correct method, but effective none-the-less as it results in a cancellation due to non-payment.   However, you can expect a different story when it comes to making a claim or wanting to stop or move your bank’s policy in the future.  

If you ever need to update the policy or make a claim, the bank will simply steer you towards the insurance company itself and you cannot rely on the quality of customer service that you will be offered by your bank. You may feel that good relations with your branch will make communication with the insurance company easier. Be warned – this is not necessarily the case.

If you want to complain

If you do change your insurance policy to that preferred by your bank you might have difficulties if you have a complaint to make. Whereas with an independent insurance provider you can always block, prevent, stop or return any payments at your bank if there is a dispute with the company. However, this won’t be an option if the bank is involved. They will ‘protect’ the interests of the insurance company they are connected to over your own, even disabling certain features of online banking to prevent a payment rejection.

Holding insurance through your bank may also limit your flexibility in relation   your bank account. If you did decide that you wished to change banks then you would likely not be able to close the account whilst the insurance policy is still in place. Again this limits your choices and your level of control of your insurance arrangements as well as your bank account. Not to mention the possible threat of higher monthly maintenance fees or even closure of the account if cancelling or taking the insurance elsewhere.

Use an independent provider instead

By now you’ll recognise that Ábaco very much encourages its clients to choose an independent, reputable company when it comes to insurance. Doing so provides the best possible cover for when you may need it, and keeps you in control of every aspect of cover, payments and cancellation.

If you need such a company, we have worked closely with Spain’s largest insurer, Mapfre, for many years and recommend them as a company you can trust to give you a fair deal in as open and honest a way as possible.  

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Leave a comment


Arthur Browne

31 August, 2021 9:57 pm

Is it true that my property is covered under my community fee’s.
Should I just insure the contents.

Oscar Paoli

1 September, 2021 2:23 pm

Dear Mr. Browne,
Not so sure this is completely true. You can always ask for a copy of their insurance to make sure what exactly is covered and what not.
With best regards,
Ábaco Advisers

Bertil Zeberg

1 September, 2021 7:51 am

Sabadell offered me a free account if I moved my insurance and deposited 700 € every month. Now I’m not a fan of sabadell they charge too much. Is there a better bank?

Oscar Paoli

1 September, 2021 2:22 pm

Hi Bertil,
There are many other options in Spain to choose from, we recommend to check with each one of them to see which one suits your interest best.
With kind regards,
Ábaco Advisers