As in most countries, it is compulsory to have insurance before driving your vehicle on the roads. In Spain it is a legal requirement to carry a copy of your insurance policy. Carrying a receipt of payment is no longer compulsory, as the police can generally check the validity of your insurance electronically by the roadside. However, if they were unable to confirm validity for any reason, you would doubtless be required to produce the same at the police station within a defined period.
When importing a vehicle to Tenerife, take extra care to check that you have valid insurance for the vehicle from the moment you arrive on the island, that takes into account that the vehicle may be about to be re-registered onto Spanish plates. Some UK policies will cover European visits for maximum periods, but they may only cover the vehicle up to the point of changing onto Spanish number plates, from which date Spanish insurance may be required. Always read the small print and make sure you have adequate cover at all times.
In Spain, it is the vehicle that benefits from the insurance, not the actual driver or owner. Hence, a valid policy will provide basic third party cover for anyone driving the vehicle legally. However, third party (Terceros) does not automatically include fire and theft and obviously does not include ‘fully comprehensive’ (todo riesgo), so each additional protection will add to the price and the insurer will doubtless place more detailed restrictions on who is to be covered for such items.
In Spain, rescue / recovery / towing is traditionally included within most policies. However, this is not universally the case, so always check carefully what is included in each instance.
There are numerous insurance providers in Tenerife, ranging from direct insurers (e.g. directline) to independent brokers with access to various insurers. Many agents speak English and some insurers even have documentation and emergency assistance hotlines staffed with English speaking operators.
Renewal and Cancellation Rules for Insurance Policies in Spain
Much confusion reins over the renewal of insurance policies in Tenerife. Many customers are confused as to how much notice they must give to cancel the renewal of a policy, or how much notice the insurance company must give of the renewal price and any changes to the policy terms or coverage.
Since 1st January 2016, changes to the law have effectively given the consumer greater protection and flexibility. Law 20/2015 states that whilst insurance companies or brokers must provide their customers with 2 months notice of any changes to the policy (which includes any changes in price up or down, or modifications to the cover or terms), customers now only have to give the insurance company 1 months notice if they don’t want to renew the policy on the terms offered. This effectively gives the customer a full month to consider the renewed terms and to shop around for a better quote or better coverage.
So what happens when the insurer doesn’t provide 2 months notice of the renewal changes? Sadly, this is an increasingly common scenario. Many insurers will only advise customers of the renewal price a few days before the policy renewal date. Cynics will obviously interpret this as a trick to deter customers from shopping around before the current policy automatically renews.
So what should a customer do if the insurance company fails to comply with the 2 month notice requirement? Well on a strict legal analysis, the above law doesn’t expressly allow one party to evade his or her obligations simply because the other party has failed to comply with its own obligations. However, the reality is that where an insurer fails to provide sufficient notice of the renewal terms, customers can realistically refuse to accept those terms after receiving the late notice, provided they do it promptly.
The insurance company or broker is very unlikely to pursue the matter legally, as a legal claim for a typical premium sum of a few hundred euros is hardly cost-effective, particularly when most Judges would consider the insurer to be in breach of their own insurance contract and would be inclined to rule in the customer’s favour.
Savvy consumers could adopt the safer route of giving their insurance company notice of non-renewal of the policy each year prior to the one month deadline, thereby keeping their foot in the door even if the insurance company hasn’t yet issued the renewal terms. However, most of us don’t plan ahead like that, quite rightly expecting our insurers to ‘play fair’ and comply with their legal obligations in the first place!
Customers should also note that where an insurance company incorrectly takes money from a customer’s bank account, that transaction can be reversed within a short period if the customer advises the bank promptly. However, such debit reversal, or cancellation of future direct debits, is not a legally recognised way of avoiding the renewal of an insurance policy, particularly where the insurance company has complied with its legal obligations.