For most Portuguese families, their home is the most valuable asset they own. However, many homeowners limit themselves to the mandatory fire insurance — required by the condominium or by the bank for a mortgage — without realising that this minimum coverage leaves their assets exposed to dozens of risks that occur much more frequently than a fire.
In this article, we explain what comprehensive home insurance truly covers, what the most common mistakes are, and how to ensure that your home — and everything inside it — is truly protected.
Fire insurance vs. comprehensive: the difference many are unaware of
Fire insurance is mandatory by law for all autonomous units in a horizontal property regime (Article 1429 of the Civil Code). However, this coverage only covers damage caused by fire, lightning, and explosion — and applies solely to the building's structure, not its contents.
Comprehensive home insurance is a much more complete policy that can include, in addition to the mandatory fire insurance, a wide range of additional coverages:
- Water damage — burst pipes, leaks, and floods. It is, by far, the most frequent cause of home claims in Portugal.
- Atmospheric phenomena — storms, strong winds, hail, and falling trees. With climate change, these events are becoming increasingly frequent and severe.
- Theft and robbery — protection of home contents against theft, attempted theft, and associated vandalism.
- Civil liability — damage caused to neighbours or third parties (e.g., a water leak in your home that damages the apartment below).
- Glass breakage — windows, mirrors, table tops, and appliance glass.
- Electrical equipment breakdown — damage due to overvoltage or short circuit in household appliances and electronic equipment.
- Home assistance — plumber, electrician, locksmith, and glazier services in emergency situations, 24 hours a day.
"Most home claims are not fires — they are water damage. And the mandatory insurance doesn't cover a single penny of that damage."
The 5 most common mistakes in home insurance
Over the years, we have identified errors that systematically recur in our clients' home policies:
- Confusing reconstruction value with market value — the insured value of the building should correspond to the cost of reconstruction, not the purchase or market value of the property. Underestimating this capital means receiving less in the event of a claim (proportional rule).
- Not insuring contents — furniture, appliances, clothing, electronic equipment — everything inside the home can represent tens of thousands of euros. Many families either have no contents coverage or have completely outdated values.
- Ignoring the proportional rule — if the insured value represents only 50% of the real value of the goods, the insurer will only pay 50% of the loss, even if the claim is less than the insured capital. This is the most unpleasant surprise for those with an outdated policy.
- Not including civil liability — a water leak or a fire affecting neighbours can generate liabilities of tens of thousands of euros. Without this coverage, the owner pays out of their own pocket.
- Renewing without reviewing — just like in business insurance, automatic renewal without review is the most common mistake. Renovation works, purchase of new equipment, or changes in the use of the property must be communicated to the insurer.
Owner, tenant, or landlord: different coverages
The type of insurance needed varies according to the property's occupancy profile. This distinction is often overlooked:
- Owner-occupier — needs to cover both the building (structure) and the contents. This is the most common situation and the one that requires the most comprehensive policy.
- Tenant — building insurance is usually the responsibility of the landlord or the condominium. However, the tenant should insure their contents and civil liability for damage they may cause to the property or neighbours.
- Landlord — must ensure building insurance and consider additional coverages such as loss of rent in the event of a claim that renders the property uninhabitable, and owner's civil liability.
How much does comprehensive home insurance cost?
The cost of comprehensive home insurance depends on several factors: location, area, age of the property, type of construction, chosen coverages, and insured values. For a two/three-bedroom apartment in an urban area, values typically range between €120 and €300 per year — a fraction of what it would cost to repair the damage from a simple burst pipe.
The question is never whether it's worth having comprehensive insurance. The question is whether the comprehensive insurance you have is adequate for your reality.
"A complete comprehensive home insurance policy costs less than €1 per day. A burst pipe affecting the downstairs neighbour can cost €10,000."
What to check in your current policy
If you already have comprehensive insurance, it's worth confirming the following points with your broker:
- Is the building's reconstruction value up to date?
- Does the value of the contents reflect what you actually have in your home?
- Do you have water damage coverage (including leaks)?
- Is civil liability included and with an adequate limit?
- Do you have 24-hour home assistance for emergencies?
- Have you carried out renovation works that were not communicated?
At Adler & Rochefort, we analyse your home policy free of charge and compare the conditions with the best offers from our partner insurers. The objective is simple: to ensure your home is protected at the best possible price.
Adler & Rochefort is an insurance broker registered with the ASF — Insurance and Pension Funds Supervisory Authority.