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10 December, 2019       LISBON - MAX. Partly sunnyº, MIN. 03º

 
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Folders  |  The insurance situation in Portugal
The insurance situation in Portugal
João Coradinho
The insurance situation in Portugal
Every citizen who gains access to Portugal for either a short or long stay will have no problems in taking out insurance for both private and professional needs. There are basically two main types of insurance concerned: 

a) Private insurance (for family and private affairs).  
b) Professional insurance (according to your profession). 

For each type of insurance contract some are:  
A) Compulsory by law.
B) Optional, depending on personal wishes and needs.  
 
   
A. COMPULSORY INSURANCE COVER:  
 
1) Civil liability insurance for car owners:  
 
There are around 70 companies on the Portuguese insurance market offering such contracts. Most work according to traditional methods, others operate over the phone. The reason why the latter are attractive in terms of price is easy to understand, however it’s clear that the cheapest offer does not mean value for money. Quite often “cheap” insurance can end up costing you more, because these companies do not have enough staff to follow dossiers and defend their clients’ interests, particularly when the latter need help. The car insurance market also includes other vehicles, such as motorbikes and mopeds. On top of the compulsory civil liability insurance you can add options in order to have more comprehensive cover.  In Portugal you will already find the “package” system where insurance companies offer a range of services in order to meet each client’s needs, with interesting prices for those who sign-up quickly.    
 
 
2) Accidents at work:  
 
In Portugal, every person working for another person (or even self-employed), must be covered by an insurance for accident in the workplace, whether they work for a company or as an individual. All self-employed persons must note that if they employ a person for domestic tasks in their home, this involves taking out insurance against accidents at work, because if the domestic help is injured at work, this falls under the total responsibility of the person taking out the insurance, i.e. the employer.   
 
In order to take out such insurance, you need the following information/documents:

a) Employee’s age
b) Monthly salary and other remuneration  
c) For part-time workers, the hourly rate and number of hours worked per week must be indicated.
 

3) Home insurance for private individuals (buildings):  
 
When a property purchased as a home involves a loan, the institution granting the loan will always require taking out a fire and multi risk insurance policy in order to ensure the capital is recovered in case of accident.
The capital to be used for this sort of contract is usually obtained by multiplying the surface area of the property in square metres (adding 15 to 20% for the communal areas) by the cost to rebuild per square metre.  This cost is currently set at 800 euros and is published in the Diario da Republica in October each year, to be implemented from the following January. As for car insurance, insurance companies often offer “packages” in this branch, in accordance with the requirements of the banks and lending institutions. One of the elements of cover where companies tend to have reservations are the risks linked to earthquakes, particularly when a building is over 15 years old. Note: life insurance is also required by credit institutions for persons taking out a loan. This covers risks linked to death or permanent disability for the amount of money concerned where the lending institution is the beneficiary to ensure they recover the total value of the money loaned, should one of the persons insured be the victim of an accident during the duration of the loan contract.  

The cost of life insurance varies according to three main factors:  

a) The age of the person being insured  
b) The value of the loan  
c) The duration of the contract.  
 
Recently, the duration of life insurance policies linked to loans has been significantly extended, making it possible to end the contract when the insured party reaches the age of 80.  
 

4) Other COMPULSORY insurance cover
 
 
 
There are other types of compulsory insurance contracts, nearly all in the field of civil liability and linked to certain risks related to pre-defined professional activities, both for companies and private individuals.  
 
   
B. OPTIONAL INSURANCE  
 
   
1. Private house insurance for goods, furniture etc.  
 
   
Every owner of a furnished house who does not have insurance to cover all risks is, to say the least, absent minded...  We all know that the objects in a home are classified in two groups:  
 
a) Everyday objects found in the home, with varying value. For example, furniture, decorative objects, light fittings, domestic appliances and cooking utensils, clothes, shoes, carpets and rugs, books, audio and visual equipment of low value, and so on.  

b) Special objects with high risk, that have a high intrinsic value and that can attract burglars. For example: objects in gold, silver, ivory, jewellery, all sorts of collectibles, paintings, prints and sculptures, rare objects, objects with an artistic value, expensive audio and video equipment, IT equipment, leather and fur coats, and so on.
 
Note : When the total value for such items exceeds 30% of the total value of the other items in the home (objects and valuables), insurance companies usually add a small extra premium according to the increase in value caused by these objects. This rarely  makes a significant change to the total cost of the insurance. There are also “packages” for this sort of cover in order to better meet client needs.  
 
Important observations:  
a) Despite a possible decrease in value due to usage, the insured objects must always be valued in terms of their new value
b) To compensate for inflation over time and to revise the value of the contents of a home, this insurance contains an automatic update clause, in accordance with the rates of indexation published each year in the “Instituto de Seguros de Portugal”
c) The simple estimation value that one gives to one’s personal belongings cannot be taken into consideration.  
 
   
2. Personal and Individual Accident Insurance  
 
This is an insurance covering personal risks in relation to both private or professional accidents (it does not replace but complements the compulsory accident in the workplace insurance). Generally, personal accident insurance policies operate 24 hours a day, anywhere in the world. Personal and individual accident insurance covers the main risks of death or permanent disability (either total or partial), to which can be added complementary cover for treatment, daily allowances if totally unable to work, daily allowances when in hospital and funeral costs. Personal accident insurance also includes other elements, such as :  
 
a) The personal individual accidents mentioned above  
b) School insurance (compulsory)  
c) Insurance to cover risks linked with sports and recreational activities  
d) Passenger insurance linked to the compulsory car insurance  
e) Travel insurance.  
 
Travel insurance has various levels of cover, firstly to meet legal obligations (minors aged 14 cannot benefit from death risks and persons aged over 70 can only take out less comprehensive cover), secondly clients can take out a more complete insurance package that meets their needs and budget.  

The most complete version of travel insurance is the “Executivo” or VIP plan, that on top of personal accidents, covers loss of luggage and all health problems that can occur when travelling, namely outside Portugal.  
 
   
 
3. Transport of Goods Insurance  
 
   
Some professions require insuring the transport or housing of objects with a high intrinsic value (paintings, sculptures, various instruments...). This sort of insurance, although possible, must be carefully planned within overall client relations, for it is by definition only temporary and most of the objects concerned are already covered by another policy, such as the multi-risk house insurance.  
 
   
4. Pet insurance (dogs)  
 

Insurance policies exist for the following risks:  

a) Civil liability: bodily and material damage caused to persons and goods by pets.  

Note: For some breeds of dog (dangerous or guard dogs), the law requires that owners take out this sort of insurance. If they do not do so, they must personally pay for the repair of the damage caused by their pet.  

b) This type of insurance can also cover accidental damage to the owners of such animals (see our article: how to insure your pet here in Portugal).  
 
   
5. Life Insurance  
 

There is a wide range of life insurance products on offer and everything depends on motivation and need of each person, as well as budget. Life insurance can be classified in three main groups:  
 
a) Life insurance in case of death, also known as “Seguros de Riscos” or “Pura Previdencia”  
b) Life insurance also known as savings or capitalisation insurance  
c) Mixed life insurance policies, containing the aforementioned characteristics combined in what are known as “Universal Life” policies.
 
   
In cases where the life insurance has no beneficiary – i.e. in accordance with the requirements of a credit institution – the capital insured, guarantees and duration are defined by the interested parties when they take out the contract, taking into consideration the following:  

- Specific needs (for example, dependent persons to be protected), age and financial means of the person to be insured  
As for savings policies, these are taken out basically in order to protect the insured party’s future, therefore they naturally depend on his or her financial means.  
 
   
6. Health insurance  
 

The insurance market in Portugal offers a wide range of choice here and all companies can cover all health problems –both natural and accidental – that can affect people. Currently, health insurance policies, although they belong to insurance companies, are not directly managed by them, but by specialised companies. Three companies exist in Portugal: Médis, AdvanceCare and MultiCare, each catering for their clients through the insurance companies with which they have set up a protocol. They all have a clinical system in all areas of health care, as well as partnerships with various clinics, hospitals and laboratories. For this type of insurance, the companies involved wanted to set up plans that cover the basic needs and budgets of their potential customers. Depending on how they operate, health insurance plans are grouped into two basic systems:  
 
a) Assistance or managed care plans.  People with this sort of insurance only have direct access to clinical treatment insofar as the medical staff and the healthcare centres concerned (clinics, laboratories, hospitals), are part of the network of healthcare providers set-up by the company managing the insurance. In this case, clients only pay a forfeit inherent to each medical act.  
 
Note: Clients with an assistance plan can access medical care from providers outside the network of the managing company, but in such cases he or she will pay quite high forfeits.  
 
b) Reimbursement plan  
 
Persons with this option have total freedom to use the services of any medical provider in Portugal. In this case, they will pay for the total of the medical costs and will then be reimbursed, once forfeits have been deducted.  
 
Note: Health insurance contracts depend mainly on the age of the person to be insured, as well as their state of health.
 
Some insurance companies set an upper age limit for taking out insurance and there are also companies on the health insurance market who, once a dossier has been accepted, commit to not breaking a contract, irrespective of the insured party’s age or the number of claims made over time. 


João Coradinho
joao.coradinho@axa-seguros.pt

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