Community insurance for property owners: what to check before taking it out

What to check first in community insurance

Taking out insurance for a property owners’ community is not just a matter of comparing a price or accepting a standard proposal. The important thing is to check whether the policy responds to the actual building, its common elements and the risks the community wants to cover. In a community, too, you need to distinguish between building structure insurance and other additional cover: not everything that appears to be “building damage” is actually covered.

The Horizontal Property Act allows the community to use part of its reserve fund to take out an insurance contract covering damage caused to the property, or to enter into a permanent maintenance contract for the building and its general installations. This does not make insurance a universal obligation identical for every building, but it does confirm that it is a common tool of community management. The Act itself states that the community must contribute to the general expenses of the property and that the administrator oversees the preservation and upkeep of the building, with urgent repairs where appropriate. In that context, the policy must be consistent with the condition and use of the building. The legal basis for this organisation is set out in the Horizontal Property Act, especially in articles 9, 10, 14 and 20.

> “Using the reserve fund, the community may take out an insurance contract covering damage caused to the property or enter into a permanent maintenance contract for the building and its general installations.”

### 1) Check exactly what is insured: building structure, common areas and ancillary elements

Before signing, check whether the policy clearly identifies the building structure of the property and whether it includes the relevant common elements: roofs, façades, downpipes, courtyards, stairwells, entrance hall, communal garage, plant room and other shared areas. In communities with annexes or distinctive features, it is also worth checking whether these are included within the insured definition or whether they need to be expressly mentioned.

Do not assume that “building” automatically means cover for everything you expect. In community insurance, wording that is too generic can leave out essential parts if they are not described or if the risk is defined too narrowly.

**Useful steps:**

1. Ask for the full policy wording, not just the sales summary.

2. Identify what is considered building structure and what is excluded.

3. Check whether the specific common areas of your building are listed.

4. See whether there are annexes or installations that require specific mention.

**Common mistake:** signing a policy on the assumption that it covers “the whole building” when, in reality, the internal definitions are more restrictive.

### 2) Scrutinise the building-structure exclusions carefully

The most delicate point is usually the list of exclusions. Here it is worth reading very carefully, because this is where many communities discover too late that a claim does not fit the policy. Exclusions may affect construction defects, non-accidental damp, wear and tear, lack of maintenance, leaks from deteriorated elements or damage arising from unnotified alterations, among other situations that each insurer may draft differently.

It is not enough to know what is covered; you need to know what is not covered. If the policy excludes damage caused by lack of upkeep, that connects directly with the community’s duty to maintain its common elements in good condition. If the building has an ageing roof, doubtful waterproofing or old installations, a misunderstood exclusion can leave the community without a response at a key moment.

**Practical tips:**

- Find the building-structure exclusions clause and read it before signing.

- Check whether water damage has limits or special conditions.

- See whether the policy excludes leaks, condensation or damp depending on their origin.

- Analyse whether damage caused by insufficient maintenance is excluded.

- Ask whether older common installations are subject to special conditions.

**Frequent mistake:** comparing only the “positive” cover and not the exclusions. In practice, the exclusion matters just as much as the guarantee.

### 3) Assess whether the insured sum matches the building and its actual condition

Although this article is not about valuations or market prices, it is still worth stressing a basic point: a community should not take out an insured sum with no relation to the building and its level of exposure. If the building structure is underinsured, a claim can lead to disputes over compensation and leave parts of the damage uncovered. If it is overinsured, the community may be paying for protection that does not reflect the reality of the property.

To adjust the policy, it is sensible to start with an internal review of the property and its common elements. The Horizontal Property Act assigns the owner the duty to keep their flat or premises in good condition and the community the upkeep of the general expenses and the preservation of the property. For that reason, a community policy should support that preservation, not replace a technical review of the building.

**Recommended actions:**

1. Review the condition of the roof, façade, downpipes and damp-prone areas.

2. Identify common installations that need specific protection.

3. Check whether there are recent works, pending works or known defects.

4. Adjust the policy to the building’s actual use: homes, garages, storage rooms or distinctive elements.

### 4) Do not forget the relationship between the policy, the statutes and the general meeting agreements

Community insurance does not exist in isolation. It must be consistent with the statutes, the internal rules and the general meeting agreements. The community can approve budgets, repair works and maintenance measures; the administrator must deal with preservation and submit the forecast spending plan to the general meeting. If there is a policy, its scope should accompany that management and not contradict it.

In addition, if the building has special uses, complex installations or common elements with a particular regime, it is worth checking whether the statutes set out specific rules on maintenance, expenses or insurance. The community must also ensure that the contract does not leave gaps between what is decided at the general meeting and what the policy actually accepts.

**Final checklist before signing:**

- Verify the identity of the insured building structure.

- Read exclusions and limits with particular care.

- Check any excesses, if they exist, and their practical effect.

- Review water, fire, weather-related and electrical damage cover if these appear in the proposal.

- Make sure the policy is compatible with the statutes and the community’s agreements.

**Practical action:** if you need an indicative valuation of the property or support organising documentation before taking community decisions, you can request an online estimate at /valoracion-vivienda-madrid. If you would rather discuss it directly with a team, contact details are available at /contacto. The UBICASA office is at Calle Montesa 29, Madrid, Monday to Friday from 10:00-15:00 and 16:00-19:00.

In short, before taking out community insurance you should focus less on the sales headline and more on three questions: what the building structure covers, what it excludes and whether the policy is aligned with the building’s actual condition and the community’s decisions. That prior review avoids surprises once the claim has already occurred and helps the policy fulfil its purpose: reasonably protecting the common property.