JANUARY 2012 |www.opp.org.uk WORDS | Susanna Lajusticia


BUSINESS Insurance matters


Are your clients fully aware of how important it is to be properly insured when moving overseas? It is not just a question of covering the new house and its contents ... what about health insurance? Have they protected themselves in the case of a death? OPP legal columnist Susanna Lajusticia offers some food for thought.


our legal services, how comfortable they feel because we offer professional indemnity insurance. As lawyers, and with a head offi ce in the UK, we must have an indemnity insurance that is closely regulated by the Solicitors Regulation Authority (SRA). We are no different from many other professionals - we all need to have proper professional indemnity insurance for any claims that might arise. However, we cannot assume (and we would make a huge mistake by doing so), that just because this is the way that things work in the UK, it would be the same for all residential property transactions overseas. I always advise clients to be cautious and to do their homework before instructing any overseas professionals. Ensure that the people you are going to be working with have their professional indemnity insurance in place. And I also advise clients to check the amount involved too. Your international buyers may well fi nd that the level of cover overseas is far less generous, and could leave them badly exposed as a result.


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And my advice for you, the overseas property professionals, is to keep things equally simple and clear, if you want clients to have trust in you and feel safe about doing business with you, then make sure you already have the appropriate insurance in place upfront. In addition, as professionals providing advice for clients moving abroad, it is wise to be aware of other insurance related matters in order to be able to help and advise clients. By offering such a ‘complete service’ your clients will be far more likely to use you again and recommend your services to others.


Health insurance is a good example of an area where many people moving abroad may look to their property


e are often told by our overseas property clients, when they decide to hire


agent for advice. We often fi nd people planning to move abroad permanently who do not even think about this beforehand. You need to warn clients about this potential pitfall. Normal medical insurance is designed for people travelling or holidaying overseas on a short-term basis. It will almost certainly not apply for someone who wants to stay and live in the new adopting country. Every country has a very different health insurance system. Residents of EU countries


“Buyers can fi nd that the level of cover overseas is far less generous, and leaves them badly exposed”


can receive free medical care when visiting another country. (EHIC card- European Health Insurance card), however you must remember to get the card before travelling.


EU pensioners moving to Spain, for example, would be in most of the cases entitled to receive full health care. A form should be requested in their home country and once in Spain they will receive a Spanish health card (cartilla.) But, for those others under retirement age who move to Spain, they will be only entitled to receive health care in


Spain based on their payments into their scheme at home, which is the national insurance contribution scheme in the UK, for example. And this care could be limited for up to 2 to-and-a-half years according to information received from the Work & Pensions Department in UK and Spain.


According to Britain’s Department of Health, the majority of early retirement schemes are based on agreements between the social partners and therefore EU regulations on coordination would not apply. For this reason, an early retired person may lose his/her early retirement benefi t if he/she moves to a EU Member State other than that state which pays this benefi t.The Spanish Work & Social Department has recently confi rmed this situation to Pannone, and the policy can defi nitely catch out people who retire early.


If you have a client who is under retirement age, it is often safest to look for private insurance cover. The whole health cover issue is a very complex area and your clients will have many different needs. Always recommend that they check their entitlements at home before moving abroad. Life assurance is another form of cover that we fi nd more and more lenders are requesting in Spain today


Susanna Lajusticia is an international property lawyer and Abogado at law fi rm Pannone. She can be contacted by telephone at +44(0) 161 909 4939 Susana.lajusticia@pannone.co.uk


as a mortgage approval condition. This is - in most of the cases - due to the age of the borrower. But we also see these requests in circumstances where only one of the spouses is the breadwinner in the family. These policies can sometimes be expensive to arrange, but again they are worth considering and recommending to clients. Other policies that we have not yet seen become compulsory for an overseas mortgage application are the so-called critical illness insurance and income protection insurance policies that every provider seems to be promoting nowadays. However, because of the current economic climate, they may be worth considering for any clients with stretching budgets or specifi c circumstances.


I would always advise my clients Facts | and fi gures can ruin the deal if they have not been worked out in advance


to be very wary of these critical illness insurances and read the small print because, as I was once told by a fi nancial advisor, many policies exclude specifi c types of common illnesses. The policies often have a very limited scope. And my last, but not least piece of advice, would be to help out with your client’s overseas home insurance. We see many clients organise this through overseas insurers and this is a perfectly valid option. However again do your home work and check the insurer and the policy terms and conditions before committing to any specifi c insurance product. It is also worth advising clients to check the previous owners’ insurance as the existing terms and conditions may already suit their needs with the benefi t of a smooth transfer to the new owner as the new policy holder.


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