Choosing between compensation or repair in your home insurance, which is better?

Deciding what is better in our home insurance – compensation or home repair – it´s not that simple and involves taking into account the advantages that each option provides.

Home insurance provides us with great security and stability in the event of a possible claim. It offers long-term peace of mind that, in the event of an accident to our home, insurance can cover the costs of restoring it to its original condition. In the worst case scenario, such as fire, earthquake, etc., this would result in the loss of the property. It will also cover relevant operations and organise such repairs as are necessary.

Regarding Unespa statistics (Spanish Union of Insurance and Reinsurance Entities), one in four Spanish households suffers an accident during the year, but only 65% of Spanish households have their homes insured.

Is your home one of these?

At BMI – INSURANCE BROKERS we are insurance brokers for: home, vehicle, life, health, travel and more. We will assist you in finding the best quality-price ratio option that is best suited to your needs and personal circumstances. If you are thinking of taking out a home insurance policy that is right for you, we encourage you to contact our team for the personalised advice you need.

What do I do if an accident occurs at home?

There are situations we hope never to have to experience. However, it is important to be prepared and, therefore, take out home insurance through a trusted insurance broker.

If you suffer an accident at home, it is essential that you contact the insurance company to report the incident. The sooner you do so, the sooner we can start to process the claim and thus you can receive compensation or repair under the home insurance policy. You have a period of 7 days in which to submit your claim and report your incident.

Once the incident has been reported, the insurer will send an expert or a repairer to your home to analyse and assess the seriousness of the damage caused. We must also provide as much information as possible to the insurer, so that they can make an accurate estimate of the damage caused and therefore provide the appropriate response.

This is when we need to consider the best home insurance policy – compensation or home repair.

At any event, in this type of situation, we can also receive advice from an Insurance Broker to act as an intermediary between the policyholder and the insurer. This will provide us with a professional and expert perspective at a time when we are at our most vulnerable and under a lot of stress. At BMI, we continually help our clients in all areas related to the validity of their insurance policy.

What is better in a home insurance policy: compensation or repair

One of the biggest debates when it comes to home insurance is to evaluate the benefits of receiving compensation versus the benefits of home repair offered by the insurer. In the following sections, we aim to resolve all your doubts in this regard so that you can make an informed decision.

What are the conditions for choosing home repair or compensation?

To be able to repair the damage, the home insurance must have the explicit consent of the insured. This means that in the event that you would prefer compensation for the damage, the insurer is obliged to provide it.

However, this cannot be applied in the same way in the opposite case, as the insurer is not obliged to offer you home repair.

First and foremost, it is important to bear the following in mind:

• According to Article 18 of Law 50/1980, the insurer must provide compensation to the insured within 40 days.
• Furthermore, Article 11 of the General Consumer and User Defence Act requires that the service provided to the insured must be safe. This implies the quality of the work and repairs carried out by the insurer.
• The insurer must provide compensation for damages based on current market prices.

Pros and cons of a home insurance policy: compensation or home repair

Undoubtedly, both options offer very interesting advantages, but simultaneously, they have a number of implications that should be taken into account. It is normal to be in doubt or uncertain on which of the two situations is most appropriate. You need to consider both your circumstances and also your needs.

If we opt for compensation, we will have more control over the budget and be able to contract the professionals who will carry out the repairs ourselves. This gives us the possibility to save or invest as much as we consider necessary and also to contract a reliable worker.

However, the biggest drawback in this situation is the amount of time and effort involved. After suffering an accident at home, we may not be in the right psychological frame of mind to organise and prepare to repair the damage.

In contrast, if we decide that the insurer should be in charge of the home repairs, we will have more and better guarantees and this will mean a reduction of more than half the budget. Furthermore, we have a very experienced and professional team, specially selected for their high quality of work.

The final decision you make will depend on your priorities and how confident you are in your home insurance. At BMI, we always ensure that all our clients have a policy that suits their individual needs.  We advise our clients in situations of uncertainty, such as not knowing whether to choose compensation or home repair.

We would be delighted to hear from you and we will gladly provide you with the advice you require.