Reading a Spanish insurance policy (póliza) before you sign

Terms used

• Póliza — The póliza is the insurance contract, made up of general, particular and special conditions.
• Condiciones generales — The condiciones generales are the insurer's standard terms, the same for all customers of the product.
• Condiciones particulares — The condiciones particulares describe your specific risk, insured person, sums, premium and period, and must be signed.
• Condiciones especiales — The condiciones especiales change or extend the general terms for a specific cover.
• Tomador — The tomador is the policyholder, who signs the contract with the insurer and pays the premium.
• Asegurado — The asegurado is the person whose life, health or property is covered.
• Franquicia — The franquicia is the part of each claim that you pay yourself.
• Carencia — The carencia is a waiting period after the policy starts when cover does not apply or some benefits cannot be claimed.

Key rules

• Restrictive clauses: A clause limiting your rights binds you only if it is highlighted and you accept it specifically in writing.
• Which terms win: Particular and special conditions usually prevail over the general conditions where they clash.
• Questionnaire: Answer the insurer's questions truthfully; wrong answers can reduce or cancel your payout.
• Changes: Tell the insurer about any change to the risk during the contract.

A policy has three layers

A Spanish policy (póliza) is not one document. It usually has three parts, and you need to find all of them before you sign.

• Condiciones generales are the insurer's standard terms. Every customer of that product gets the same text.
• Condiciones particulares describe your own case: the risk covered, who is insured, the sums, the premium and the policy period. You sign this part.
• Condiciones especiales change or extend the general terms for a specific cover you have chosen.

Read the particular and special conditions first. Where they clash with the general conditions, they usually win, as long as they are not worse for you than a mandatory legal rule. If a wording is ambiguous, it is read against the insurer. Courts decide specific conflicts, so do not rely on a clash working in your favour. Ask the insurer to fix it in writing before you sign.

Four terms you will meet

• Tomador is the person who signs the contract and pays the premium.
• Asegurado is the person whose life, health or property is covered. It can be you or someone else, so check that both names are right.
• Franquicia is the part of each claim you pay yourself. Find the amount.
• Carencia is a waiting period after the policy starts, when cover does not apply or some benefits cannot be claimed yet. It is common in health and decesos (funeral) policies. Note the date your cover really begins.

On life and accident policies there is also a beneficiario, the person who receives the payout. The tomador names them, and they can be a third party.

Restrictive clauses need your separate signature

A clause that limits your rights once something has happened (a cláusula limitativa) only binds you if it is clearly highlighted, for example in bold, and you accept it specifically in writing. One signature on the whole policy is not enough. A clause that does not meet both conditions cannot be enforced against you.

Clauses that only define what is covered in the first place (cláusulas delimitadoras) do not need this treatment. The line between the two is judged case by case, so read every exclusion and limit as if it applied to you. If a restriction is hidden in small print, ask for it to be highlighted and signed separately, or choose another policy.

What you must tell the insurer

Answer the insurer's questionnaire truthfully. The insurer cannot rely on things it never asked about, so you do not have to volunteer everything. Keep a copy of the questions and your answers.

If a wrong or missing answer comes to light before a claim, the insurer can end the contract by notice within one month of learning of it. If it comes to light after a claim, the payout is reduced in proportion to the premium you paid against the premium that should have applied. If you answered wrongly on purpose or with gross negligence, the insurer can refuse to pay and keep the premiums due for the current period. A court looks at whether the hidden fact really affected how the insurer judged the risk.

You must also report changes to the risk during the contract, such as a change in use of the property.

Timeline and deadlines

• Answer the insurer's questionnaire truthfully: before you sign

• Report any change to the risk to the insurer: during the contract, as soon as it happens

• The insurer may end the contract by notice if it finds an inaccuracy before a claim: within 1 month of learning of it

Checklist before you sign any Spanish policy

Before you sign a Spanish policy

• Find the three layers of the policy: the general conditions (the insurer's standard terms), the particular conditions (your risk, sums, premium and period) and any special conditions (extra or changed cover).

• Check that you are named correctly as the tomador (the person who takes out and pays for the policy) and that the asegurado (the person or property covered) is right.

• Check the sum insured against what you would really need to repair or replace.

• Find the franquicia (the part of each claim you pay yourself) and note how much it is.

• Look for the carencia (the waiting period before cover starts) and note the date cover begins.

• List every exclusion and limit, and check that clauses restricting your rights are highlighted, for example in bold.

• Sign separately to accept each restrictive clause, because a single signature on the whole policy is not enough.

• Answer the insurer's questionnaire truthfully and completely, and keep a copy of your answers.

• Tell the insurer in writing about any change to the risk during the policy, such as works or a change of use.

• Check the renewal terms: most policies are annual and renew automatically, for one year at a time.

• Diarise the date one month before renewal, and cancel in writing you can prove, for example by burofax or registered mail, if you want to stop the policy renewing.

• Ask whether you can withdraw within 14 days if you buy the policy online or by phone.

What to watch out for

• Hidden restrictions may not count, or may catch you out: A clause that limits your rights is only enforceable against you if it is highlighted and you accepted it specifically in writing. A signature on the whole policy is not enough. Clauses that merely define the risk covered do not need this. Find every highlighted clause and sign separately to accept only those you understand. Ask the insurer to explain any you do not.

• Wrong answers on the questionnaire can cost you the payout: If you give inaccurate answers, a claim can be reduced in proportion to the premium you paid. With wilful misconduct or gross negligence, the insurer can refuse to pay and keep the premiums for the current period. Answer every question truthfully and keep a copy of the completed questionnaire.

• Conditions can clash: The general conditions are standard for everyone, while the particular and special conditions are written for you. Where they conflict, the particular and special ones usually prevail, and ambiguities are read against the insurer.

Frequently asked questions

Can the insurer refuse to pay if I answered the questionnaire wrongly?

Yes, if you acted with wilful misconduct or gross negligence, the insurer can refuse to pay and keep the premiums for the current period. If the answer was simply inaccurate, the payout is usually reduced in proportion to the premium you paid against the premium that would have applied. The insurer must show that the hidden detail affected how it judged the risk.

Do I have to declare things the insurer never asked about?

No, the insurer cannot rely on omissions about points its questionnaire did not ask. You must answer the questions truthfully, though.

Is a restrictive clause valid if I signed the whole policy?

No, a single signature on the whole policy is not enough to make a restrictive clause valid.

Can the person insured be different from the person who signs the policy?

Yes, the tomador (who signs and pays) and the asegurado (whose life, health or property is covered) can be different people.