Car insurance has been mandatory in Portugal since 1980. But the fact that it's compulsory doesn't mean most drivers truly know what is — or isn't — covered. The truth is, many Portuguese choose car insurance based on price and forget to check if the protection is adequate for their reality.
Car insurance in Portugal is often searched by American expats as auto insurance; the legal requirement and policy structure are Portuguese, even when the terminology differs.
In this article, we explain the differences between the main types of coverage, the most frequent mistakes, and what you should demand from your insurance intermediary.
The three levels of coverage: which one is right for you?
The Portuguese insurance market essentially offers three levels of protection for individual car insurance. The right choice depends on the vehicle's value, its usage profile, and the level of risk you are willing to assume.
- Third-Party Liability (mandatory) — covers damages caused to third parties in the event of an accident. It is the legal minimum required but does not protect your own vehicle or its occupants.
- Comprehensive Third-Party (TPL + additional coverages) — includes third-party liability plus coverages such as theft, fire, natural phenomena, and roadside assistance. A balanced option for vehicles older than 3-4 years.
- Fully Comprehensive — the most extensive coverage, which also includes own damage from collision or overturning. Recommended for new or high-value vehicles.
"The cheapest insurance is rarely the most economical. The true cost of inadequate insurance is only discovered on the day of a claim."
The 5 most common mistakes in car insurance
In our experience of over 15 years advising private and business clients, these are the most frequently repeated mistakes:
- Choosing solely based on price — a low premium can hide high excesses, important exclusions, or insufficient coverage limits. Always compare the terms and conditions, not just the price.
- Not declaring professional use of the vehicle — if you use your personal car for regular work commutes, deliveries, or transporting goods, the insurer may refuse a claim if professional use is not declared.
- Ignoring the vehicle's true value — many policies maintain an insured value that no longer corresponds to the market value. In the event of a total loss, you will receive less than the vehicle is actually worth.
- Not including legal protection — in the event of a dispute after an accident, legal costs can easily exceed €5,000. Legal protection is a low-cost coverage that many overlook.
- Forgetting occupant cover — mandatory third-party liability covers third parties, but your vehicle's occupants may be unprotected. This is especially important if you regularly transport family.
When does it make sense to change insurers?
Contrary to what many believe, loyalty to an insurer is not always rewarded. The market is competitive, and conditions vary significantly from year to year. There are clear signs that it's time to seek a second opinion:
- The premium increased by more than 10% without clear justification (claim, vehicle age)
- The insurer refused or made it difficult to manage a claim
- You were never offered a proactive review of your coverages
- You bought a new vehicle and kept the same conditions as the previous one
- You have more than one vehicle and do not have multi-vehicle policy conditions
The role of an insurance intermediary: why it makes a difference
Contracting directly with an insurer or through an online comparison site might seem simpler, but there's a fundamental difference: the intermediary works for you, not for the insurer.
An insurance intermediary authorised by the ASF analyses your real needs, compares proposals from various insurers, and supports you throughout the life of the policy — including in claims management, which is precisely when the quality of service makes the biggest difference.
At Adler & Rochefort, your car insurance analysis is free. We compare conditions across several partner insurers and present the solution that best suits your profile — without obligation.
"Car insurance is not a cost — it's the difference between an inconvenience and a financial catastrophe."
Adler & Rochefort is an insurance intermediary registered with the ASF — Insurance and Pension Funds Supervisory Authority.
More on this subject: Fleet insurance: 5 mistakes that inflate the premium without improving coverage · Insuring a car that is worth more than the market says it is · Insuring a car collection: when separate policies stop making sense