Property Insurance in Mallorca: A Complete Guide for Foreign Owners

Insurance is one of those topics that most property buyers in Mallorca think about for precisely five minutes before moving on to more exciting subjects. That is a mistake. Mallorca’s climate brings specific risks — flash flooding, hailstorms, coastal salt damage, and the occasional gota fría (cold drop) that can dump a month’s rainfall in a single afternoon — and if your property is uninsured or underinsured when disaster strikes, the financial consequences can be severe. This guide explains the types of cover available, what you should expect to pay, what the Spanish system requires, and how to avoid the gaps that catch foreign owners out.

Is Property Insurance Mandatory in Mallorca?

The short answer is: it depends on your situation.

• If you have a mortgage: Yes. Every Spanish bank that issues a mortgage (hipoteca) will require you to hold building insurance (seguro del hogar with at least continente cover) for the duration of the loan. The bank will typically insist that the insured value covers at least the reconstruction cost of the property. Many banks will try to sell you their own insurance product at completion — you are not obliged to accept it, and you can often find better value elsewhere, provided the policy meets the bank’s minimum requirements. If you are exploring mortgage options, factor insurance costs into your calculations from the outset.
• If you own outright (no mortgage): Building insurance is not legally mandatory for individual owners, but it is strongly advisable. Without it, you bear the full cost of any damage to the structure — a burst pipe, fire, or storm can easily cause tens of thousands of euros in damage.
• If you are in a community of owners: The comunidad de propietarios is legally required to hold a communal insurance policy covering the building’s structure and common areas. However, this policy does not cover the interior of your individual property or your personal contents. You need your own policy for that.
• If you rent out your property: Insurance is not legally required for landlords, but operating without it is reckless. Tenant damage, liability claims from guests, and loss of rental income due to property damage are all real risks that insurance can mitigate.

Types of Property Insurance Cover

Spanish property insurance (seguro del hogar) is structured differently from a typical UK home insurance policy. Understanding the components helps you build the right cover for your situation.

Continente (Building / Structure Cover)

This covers the physical structure of the property: walls, roof, floors, fixed installations (plumbing, electrical wiring, heating systems), and permanent fixtures (fitted kitchen, built-in wardrobes, bathroom suites). It protects against damage from:

• Fire and explosion
• Water damage (burst pipes, leaks, flooding)
• Storm, wind, hail, and lightning
• Theft and vandalism
• Impact (vehicles, falling trees, aircraft)
• Electrical damage to fixed installations

The insured value should reflect the reconstruction cost of the property, not the market value or purchase price. Reconstruction cost is typically lower than market value because it does not include the land. However, underestimating the reconstruction cost is one of the most common insurance errors — if you insure for €150,000 but the actual reconstruction cost is €250,000, the insurer may apply a proportional reduction (infraseguro) to any claim, leaving you significantly out of pocket.

Contenido (Contents Cover)

This covers moveable property inside the home: furniture, electronics, clothing, art, appliances, and personal belongings. For holiday rental properties, contents cover is particularly important as furnishings represent a significant investment. Most policies categorise contents into:

• General contents: Furniture, kitchenware, linens, electronics
• Valuables (objetos de valor): Jewellery, art, antiques, collections. These typically have a sub-limit (e.g., €3,000 per item or €6,000 total) unless specifically listed and valued on the policy.
• Cash: Usually covered up to a low limit (€300–600)

For a furnished two-bedroom apartment in Mallorca, contents cover of €20,000–40,000 is a reasonable starting point. For a fully equipped luxury villa, €50,000–100,000+ may be needed.

Responsabilidad Civil (Public Liability / Third-Party Liability)

This covers your legal liability if someone is injured or their property is damaged as a result of your property. Examples include:

• A guest slips on a wet terrace and breaks their arm
• A tile falls from your balcony and damages a parked car
• A water leak from your flat damages the flat below
• A tree in your garden falls onto a neighbour’s property

Liability cover is particularly important for rental properties. If a holiday guest is injured on your property, you could face a substantial claim. Most standard policies include €150,000–300,000 of liability cover, but for rental properties, consider increasing this to €600,000 or more. The additional premium for higher liability limits is typically modest — often just €20–50 per year.

Defensa Jurídica (Legal Defence)

Many Spanish home insurance policies include a legal defence component, covering the cost of legal representation in disputes related to the property. This can cover:

• Disputes with neighbours or the community of owners
• Disputes with tenants
• Claims against contractors for defective work
• Planning or administrative disputes with the town hall

Cover limits are typically €3,000–15,000 per claim. While this will not cover a major legal battle, it is useful for the smaller disputes that commonly arise in property ownership.

The Consorcio de Compensación de Seguros: Spain’s Unique Safety Net

Spain has a distinctive and rather excellent insurance mechanism that many foreign owners are unaware of: the Consorcio de Compensación de Seguros (CCS). This is a government-backed entity that provides cover for “extraordinary risks” that private insurers typically exclude:

• Floods (including flash floods and gota fría events)
• Earthquakes (rare in Mallorca but not impossible)
• Volcanic eruptions (not a Mallorca risk, but covered nonetheless)
• Terrorism
• Civil unrest and riots
• Exceptionally severe storms (when declared as an extraordinary event by the authorities)

The CCS surcharge is automatically included in every Spanish property insurance policy — you do not need to request it or pay separately. The cost is built into your premium. This means that even a basic Spanish home insurance policy provides natural disaster cover that would be extremely expensive or unavailable in many other countries.

This is particularly relevant for Mallorca, where flash flooding has caused significant property damage in recent years. The devastating floods in the Llevant region (eastern Mallorca) in October 2018, which caused loss of life and millions of euros in property damage, were covered by the CCS for insured properties.

Community Insurance (Seguro de la Comunidad)

If your property is within a comunidad de propietarios (community of owners) — which includes any apartment building, townhouse complex, or residential development with shared areas — the community is legally required to hold its own insurance policy.

What the Community Policy Covers

• The building’s structure (external walls, roof, stairways, foundations)
• Common areas (entrance hall, corridors, lifts, communal gardens, swimming pool)
• Shared installations (water mains, main electrical supply, lift machinery, central heating)
• Third-party liability for the community (e.g., someone slipping in the communal pool area)

What It Does NOT Cover

• The interior of your individual property (walls, floors, fixtures within your unit)
• Your personal contents and furnishings
• Your individual third-party liability as an owner or landlord
• Loss of rental income

This is a critical distinction. Many foreign owners assume the community insurance covers everything and do not take out their own policy. When a pipe bursts inside their flat and damages the flooring, furniture, and the flat below, they discover too late that they are personally liable for their own damage and potentially the neighbour’s as well.

Checking the Community Policy

Before purchasing a property in a community, ask to see the current community insurance policy. Check:

• Is the insured reconstruction value adequate, or has it not been updated in years?
• Does it include public liability for common areas?
• Are there any exclusions that concern you (e.g., some policies exclude pool-related injuries)?
• When was the policy last reviewed or put out to tender?

If the community insurance is inadequate, raise it at the next general meeting. As an owner, you have the right to propose a policy review.

Special Considerations for Rental Properties

If you rent your Mallorca property — whether as a holiday let or on a long-term basis — your insurance needs are different from those of a simple holiday-home owner.

Holiday Rental Insurance

Standard home insurance policies in Spain may not cover commercial holiday rental activity unless explicitly stated. When you take out or renew your policy, you must inform the insurer that the property is used for tourist rental. Failing to disclose this can invalidate your cover entirely. Specialist holiday rental policies typically include:

• Enhanced public liability (€300,000–600,000+) for guest injuries
• Cover for guest theft or accidental damage to the property
• Loss of rental income if the property is uninhabitable due to an insured event
• Cover for temporary accommodation costs if you need to relocate guests mid-stay
• Legal defence for guest claims

Expect to pay 20–40% more than a standard home insurance policy for holiday rental cover. The additional cost is well justified by the higher risk profile and the potentially devastating financial impact of an uninsured guest injury claim.

Long-Term Rental Insurance

For properties let on 12-month contracts, the key additional covers to consider are:

• Unpaid rent protection (impago de alquiler): This covers lost rental income if a tenant stops paying. Given that eviction in Spain can take 6–12 months through the courts, this cover is highly valuable. Policies typically cover 6–12 months of rent and include legal costs for the eviction process. Premiums are approximately €150–400 per year depending on the rent level.
• Tenant damage: Cover for damage beyond normal wear and tear caused by the tenant.
• Legal expenses: Enhanced cover for landlord-tenant disputes.

What Does Property Insurance Cost in Mallorca?

Premiums in Mallorca are generally reasonable compared to the UK, partly because construction is predominantly concrete and masonry (lower fire risk than timber-frame buildings) and partly because the CCS system pools extraordinary risks at a national level.

Typical Annual Premiums (2025-2026)

Property Type	Cover Level	Annual Premium
1-2 bed apartment (standard)	Building + contents + liability	€180–350
3-bed apartment or townhouse	Building + contents + liability	€280–450
Detached villa with pool	Building + contents + liability	€400–700
Large villa / finca with grounds	Building + contents + liability	€500–1,200
Holiday rental apartment	Enhanced cover + rental liability	€300–550
Holiday rental villa with pool	Enhanced cover + rental liability	€550–900

These are indicative ranges. Premiums vary based on location (coastal properties may cost more), construction year, security features (alarms, reinforced doors), claims history, and the excess (franquicia) you choose. Higher excesses (€300–500 vs the typical €150) can reduce premiums by 10–20%.

Common Gaps and Exclusions to Watch For

Every insurance policy has exclusions, and Spanish home insurance is no exception. Here are the most common gaps that catch foreign owners:

• Unoccupied property: Many policies reduce or void cover if the property is unoccupied for more than 30–60 consecutive days. For holiday homes that sit empty for months, check the vacancy clause and arrange regular documented visits via your property manager.
• Swimming pool liability: Not all standard policies adequately cover pool-related injuries. If you have a pool (especially if renting to guests), verify pool accidents are explicitly covered with a sufficient limit.
• Gradual damage: Insurance covers sudden events, not gradual deterioration. A pipe that bursts suddenly is covered; one that has been leaking slowly for months may not be.
• Poor maintenance: If damage resulted from failure to maintain the property (e.g., a roof leak due to visibly broken tiles), the claim may be rejected.
• Garden and exterior structures: Pergolas, garden furniture, and sheds may not be covered under the main policy. Check whether they need to be added separately.
• Electrical surge: Electrical storms are common in Mallorca in autumn. Ensure your policy covers damage from power surges and lightning strikes.

Recommended Approach: Building the Right Cover

Here is a sensible approach to insuring your Mallorca property:

1. Start with accurate valuations. Get a professional estimate of the reconstruction cost (your architect or surveyor can provide this) and a realistic valuation of your contents. Underinsurance is the most common problem.
2. Match the policy to the use. A holiday home, a rental property, and a permanent residence have different risk profiles. Make sure your policy reflects how the property is actually used.
3. Increase liability cover. The standard €150,000 is inadequate for rental properties. Budget the extra €20–50/year to increase it to €300,000–600,000.
4. Check the vacancy clause. If the property will be empty for extended periods, ensure the policy does not void cover after 30 or 60 days.
5. Consider unpaid rent protection. If you are letting long-term, the €150–400/year premium is trivial compared to the cost of 6–12 months of unpaid rent plus legal fees.
6. Use a local broker. An English-speaking insurance broker in Mallorca can navigate the Spanish market, explain the policy wording, and advocate for you in a claim. The service is usually free to you (the insurer pays the commission).
7. Review annually. Reconstruction costs, contents values, and your circumstances change. Review your policy at each renewal to ensure it still fits.

Property Insurance and Your Mortgage

If you are buying with a Spanish mortgage, your bank will require building insurance before releasing funds. The bank will specify a minimum insured value (usually the loan amount or reconstruction cost, whichever is higher) and must be named as the beneficiary on the policy. You have the legal right to choose any insurer that meets the bank’s requirements — their own products are often not the best value, though some banks offer interest rate discounts for taking their insurance. Compare the total cost before deciding.

Do Not Skimp on Insurance

Property insurance in Mallorca is affordable relative to the asset it protects. A comprehensive policy for a two-bedroom apartment costs roughly €250–400 per year — less than a single night in a decent Palma hotel. For that modest outlay, you protect yourself against risks that could otherwise cost tens or hundreds of thousands of euros.

The Consorcio system means you are covered for natural disasters. The building cover protects against fire, flood, and storm. The liability cover protects against guest or neighbour claims. The contents cover protects your furnishings. And the legal defence cover helps if disputes arise. It is, without exaggeration, the best-value investment you will make as a Mallorca property owner.