To put it simply, if you insure for €100,000 and it should be €300,000 you would save 2/3 of the premium cost but at the same time you would only be 1/3 insured. The result is that if you make a claim, they will pay only one third of the amount claimed. In this example a claim for €30,000 would be settled at just €10,000, leaving you well out of pocket and probably with a grudge against the insurer. ( The same rule is applicable for contents )
The question is how to be certain that you have insured for the correct amount, which we at Ibex are asked regularly. The Portuguese Insurance Institute publishes average rebuilding costs per square metre each year and from this we can calculate the rebuild cost, but as this is an average it is inevitable that certain individual properties and some areas will require higher or lower figures, and including underfloor heating will always increase the cost.
The cost per square metre is only for the building and assumes that it is built of standard construction, but you also need to insure your boundary walls or fences, terraces, swimming pool and tennis courts plus cover costs for site clearance and professional fees, and from our experience Ibex is able to recommend the rebuilding cost to take account of these whenever we quote.
Banks will always provide insurance for your home but some will insure for the purchase price, others will insure based solely on the Portuguese Insurance Institute published figures so exclude terraces, pools etc, and if you have a mortgage, others will insure for the amount of their mortgage irrespective of the actual rebuilding cost.
It is a relatively easy calculation for us at Ibex to make and it makes sense to insure for the correct amount rather than risk a lower claim settlement than the actual cost.
Ibex Insurance Making Life Easier

For more information, Tel: Almancil: (+351) 289399774 Tavira: (+351) 281325842 or email: Algarve@ibexinsure.com