Fire Insurance

Managing a building involves many responsibilities, but few are as critical as the safety of the building and the families who live there. Among the most frequent questions at building meetings, one stands out: is fire insurance really mandatory?

In this article, we explain what Portuguese law says and what the fundamental role of the administrator is in this process.

Legal Obligation

According to Article 1429 of the Civil Code, fire insurance is mandatory for all units in buildings. This insurance should cover not only individual units but also the common areas of the building. Although the law only mandates fire coverage, multi-risk insurance is a more common option, offering a much more comprehensive protection (water damage, electrical problems, seismic activity, etc.).

The Role of the Administrator: What can and should they do?

The Administrator is not just an account manager; they are the guarantor that legality and security are maintained. Regarding insurance, their functions are divided into duties and powers:

1. Check if insurance exists.

The Administrator must confirm that all owners have insurance for their units. If the owners have their own insurance (usually associated with the mortgage), they must provide the Administrator with a copy of the policy and proof of payment.

2. To take out insurance on behalf of the owners.

If an owner fails to prove the existence of insurance, the Administrator has a legal obligation to take out insurance on behalf of the defaulting owner. In this scenario, the building pays the premium to guarantee the building's security, with the cost subsequently charged to the owner in question.

3. Update the insured capital

It is the Administrator's responsibility to propose an annual update to the insured capital at the shareholders' meeting. A common mistake is keeping the reconstruction value outdated in relation to inflation and current construction costs, which can result in insufficient compensation in the event of a claim.

The security of your assets should not be left to chance. Fire insurance is a legal requirement, but its proper management is a testament to diligence and professionalism.

Need support managing your building? At Petal Condomínios, we guarantee that your building complies with all legal regulations with maximum efficiency.