A US homeowners policy and a Portuguese multirriscos policy answer different questions. Most of the surprises American owners meet in Portugal come from assuming the second works like the first — on valuation, on liability, and on what happens when the sum insured is too low.
Americans now make up a large share of buyers in Lisbon, Cascais, the Algarve and Comporta. The purchase process here is well documented; the insurance that follows it is not, and the differences are structural rather than cosmetic. This page sets out what actually changes.
Five differences that matter
| In the United States | In Portugal |
|---|---|
| Replacement-cost coverage, often with an inflation guard and a coinsurance clause that is rarely triggered on a homeowners form | The regra proporcional: if the sum insured is below the rebuild cost, every settlement is cut in the same proportion — including partial claims |
| Broad HO-3 style all-risks on the dwelling as standard | Named perils as standard; all-risks exists but is a specialist wording you have to ask for |
| Liability limits of $300k–$500k, extended by a personal umbrella policy | Liability limits on a retail policy are often far lower, and the umbrella concept does not exist in the same form — the limit is bought inside the household or a separate personal liability policy |
| Earthquake and flood carved out into separate federal or specialist policies | Earthquake is a rider on the household policy, priced by zone. Lisbon and the Algarve are seismic; leaving it off is a decision, not a default |
| Title insurance protects the buyer against defects in title | Title insurance is not used. The equivalent protection comes from the Conservatória do Registo Predial record and the notary, checked by your lawyer before completion |
The sum insured is a construction figure, not a price
The single most common error on a US-owned property here is insuring it for what was paid. On a coastal plot, land can be most of the purchase price, and it cannot burn down. The building figure has to be the cost of rebuilding: construction at current local rates, demolition, professional fees, and the specialist labour and imported finishes that a renovated quinta or a contemporary villa actually needs.
Get that figure wrong on the low side and the proportional rule does the rest. There is no equivalent of the forgiving coinsurance treatment on a US homeowners form: the arithmetic is applied literally, and it is applied to partial claims. The mechanics are set out in insured values that have stopped matching the thing insured.
Owning through a structure
Property here is frequently held through a Portuguese company, an SPV, or occasionally a US LLC. That is a legitimate arrangement, and it changes the insurance in specific ways:
- The insured must be the owner. A policy in an individual's name over a building owned by a company is arguably void for want of insurable interest. The name on the policy has to match the name on the caderneta predial and the registry.
- Household wordings assume a person. Contents, valuables and family liability sections are written for a household, and a corporate-owned property sometimes has to be split: the building on one policy, the contents and valuables on the residents' own.
- Directors of the holding structure have their own exposure, which sits outside a property policy entirely.
- Letting through the structure makes it a commercial risk, with the RNAL registration and guest liability that go with it.
The non-resident problem
Most US-owned properties here are empty for large parts of the year, and that is what the underwriter is actually pricing. Three clauses decide it:
- Unoccupancy. Cover for theft and escape of water is commonly suspended after 30, 60 or 90 consecutive days without occupation. Declare the real pattern and have the clause written around it.
- Keyholding. Who attends when the alarm activates, and how quickly. A local keyholder or property manager is often a condition rather than a convenience.
- Maintenance. Escape of water in an unoccupied house is the most frequent large loss on this kind of property. Turning the supply off between visits is cheap and is usually written into the policy.
Possessions moved from the United States
Furniture, art, jewellery and collections shipped from the US are exposed twice: once in transit and once on arrival, where they land inside a Portuguese contents sum insured that was set before they existed. The transit leg is a marine-cargo placement rather than an extension of the removals company's liability — the difference is explained in moving a collection to Portugal. On arrival, anything above the single-article limit has to be scheduled, and US appraisals usually need converting to a Portuguese basis of valuation, which is not the same thing as converting the currency.
Buying: the wire that goes to the wrong account
Payment-diversion fraud around property purchases is now the most common financial loss a foreign buyer suffers here. The pattern is consistent: an email in the middle of a transaction, apparently from the lawyer or the agent, giving revised bank details for the deposit. Verify every set of banking details by voice on a number you already had, never one taken from the email itself, and treat any change of account mid-transaction as fraudulent until proven otherwise. Cover for it exists and is described in cover for fraud, impersonation and extortion.
What to have ready
- NIF (Portuguese tax number) for each owner, or the company's NIPC.
- Caderneta predial and the registry extract (certidão permanente) for the property.
- Built area, construction year, construction type, and any renovation works.
- Photographs inside and out, and the security actually installed.
- Occupancy pattern for the year and details of any keyholder.
- Valuations or appraisals for anything to be scheduled.
A Portuguese bank account is not needed to obtain terms, and the policy documents, the schedule and the claims correspondence can all be handled in English.
Have a Portuguese property reviewed
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Adler & Rochefort is a commercial brand of Ownizo, Unipessoal Lda., registered with the Portuguese Insurance and Pension Funds Supervisory Authority (ASF) under no. 425591790/3. General information only, not personalised advice; cover, sub-limits and conditions vary by underwriter and by risk.
More on this subject: The unoccupancy clause: what happens when your Portuguese home sits empty · Solar panels, EV chargers and heat pumps: are they covered by your home policy? · The security conditions attached to your policy