Decennial Insurance: What It Is, What It Covers, and When It’s Mandatory

If you’re planning to buy a new home, you’ve probably heard about decennial insurance, but do you really know what it is, when it’s mandatory, and what it covers? In this article, we explain everything you need to know to protect your investment.

What is Decennial Insurance?

Decennial insurance is a warranty policy that protects buyers against serious structural damages in residential buildings. It is valid for 10 years from the completion of construction and is designed to cover defects that could compromise the stability and safety of the property, such as issues with foundations, load-bearing walls, pillars, or beams.

Thanks to this insurance, homeowners do not have to bear the costs of major structural repairs, as the insurance company takes care of compensation or repairs.

Is Decennial Insurance Mandatory?

Yes, the obligation to contract decennial insurance is established in the Building Regulation Law (LOE). It is a key requirement to:

• * Register a newly built property in the Property Registry.
• * Obtain mortgage financing for selling the units.
•  * Sell properties within the 10 years following completion of construction.

Exception: Self-builders who construct their own homes are not required to have it unless they sell the property before the 10-year period ends. In that case, the insurance must be contracted for the remaining years.

This insurance is intended for developers, builders, and companies that develop new residential buildings for sale, including freelancers, SMEs, and large real estate developers.

What Does Decennial Insurance Cover?

Decennial insurance protects against serious material damages affecting essential structural elements, such as:

• * Foundations and footings
• * Pillars and load-bearing walls
• * Beams and floor slabs
• * Ground settlement

It does not cover minor defects, aesthetic issues, normal wear and tear, or lack of maintenance.

Additionally, it is possible to purchase optional coverages to extend protection, such as waterproofing roofs and facades or coverage for pre-existing items integrated into the original construction in case of renovations.

How Much Does Decennial Insurance Cost?

The cost of decennial insurance is usually modest compared to the total construction budget, ranging between 0.55% and 0.70% of the total project cost. However, the final price depends on several factors:

• * Type of foundation and structural materials
• * Number of floors and presence of basements
• * Location and characteristics of the land
• * Final value of the building and additional coverages
• * Date the insurance is contracted and construction completion
• * Supervision and certification by a Technical Control Office (OCT)

As a general estimate, decennial insurance can cost between €390 and €15,000, depending on the type of property and project complexity.

Conclusion

Decennial insurance is an essential guarantee for anyone buying a new home. It protects your investment against serious structural damage, ensures homeowner peace of mind, and is a legal requirement for developers and builders. Before buying, always verify that your property has this coverage and consider additional options according to your needs.