Newsletter November 2015

We have been informed that there are some changes in compensation rates payable in Spain from 1st January 2016.   The Spanish Government have increased injury compensation rates for death and disability when involved in a motor traffic accident.  All insurance companies offering cover in Spain must comply with the new rules.   At present we do not know what the increased rates of compensation will be but it may affect the cost of car insurances in general.  We will keep you updated.

UK Registered Vehicles.  Following the UK Governments Summer Budget 2015 it was decided that they would be enforcing an increase in the current rate of insurance premium tax.  In terms of the impact on you the customer it will mean that as from 1st November 2015 any policy subject to UK insurance premium tax will increase from the current rate of 6% to the new rate of 9.5%. This impact will see an increase of 3.5% in addition to any insurance rating changes.

Our insurers will always endeavour to provide you the customer our most competitive premium on all insurance products but with a government enforced change this will mean an unavoidable premium increase at your next renewal date.  If you wish to know further on these tax increases or the governments reasoning why this will help increase revenue for the government please see the web link below:

Keeping rates down
Liberty as well as many other insurers are looking to provide digital copies of insurance policies from 1st January 2016.   Already we do not receive hard copies for renewals, this will mean that even new policies will be sent in digital format.  If it is not possible for clients to access copies online then we will print out a copy and send them to you, but we will not be receiving hard copy policies at all.    The effect of sending out digital copies will enable premiums to be kept down in the light of the pending increases in uk taxes and increased compensation payments as set down by the Government.  Abbeygate Insurance stopped sending out hard copies over 2 years ago as clients with Abbeygate know.

Digital filing and sensitive customer information data
EU Insurance will also be taking a step forward in digitalising all our files and customer data information.  Having been here over 10 years now our paper filing system is enormous.  Adding more filing cabilets annually to the office which not only take up space but require reams of paper and copious supplies of ink.   Our dead filing is also becoming unmanageable.  We are currently starting to digitalise all our files keeping clients information and paperwork on a secure network, password secured providing a very safe and effective system.    With data protection becoming stricter every day, we have to comply and although this is a mammoth task, we hope that as valued clients you will appreciate that we are working on keeping your personal data more secure.

Emergency Information in the event of an accident
It is necessary again to relay information to clients on what to do in the event of an emergency, breakdown or accident.  I still receive phone calls all over the weekend from clients needing assistance when broken down.
Please use the following phone numbers in the event of a breakdown:-
Liberty Seguros:  900 101 369 (outside Spain or uk mobile call 0034 934 955 125)
Abbeygate: 0034 917 885 948

Both offer emergency breakdown service 365 days a year 24 hours a day and speak English.  My mobile number is used for both business and personal and although I will always try and get back to clients in the event of an emergency, it is really important to have the correct emergency numbers in your phone.

If you use another  breakdown company not associated with your policy, you will not be reimbursed.  Insurance companies have their own trucks for breakdown and will tow you to the nearest garage or home at no cost to you.

Important Questions:-

  • Have you got the correct insurance documents in the car?  (i.e. current dated)
  • Do you have an Accident and Emergency form?  (Blue and Yellow form which needs to be completed in the event of an accident?)
  • Are you familiar with the numbers to call in the event of an emergency?
  • Do you know what to do in the event of an accident?  Please go onto the website for further information
In summary you need to complete the blue and yellow European Accident form, both parties (if another party is involved) and keep the top copy, this needs to be completed even if you have an own damage claim, even in the event of a small scrape we must receive a completed form.   If this is not possible at the scene of the accident, make notes, take pictures, make sure you have policy number of 3rd party, insurance company, name, telephone number, correct number plate.   Please state where, when and time of accident, any injuries, any witnesses.  If any party is injured it is best to go straight to the hospital and to obtain a medical report.   If there is conflict with the 3rd party call the police.

If no other party involved then we still need the form completed, inputting your details in the form under Vehicle A.  
The European Accident form has to be scanned and emailed or sent to us as soon as possible.  We can set up the claim for you and start the process.

Car Documents
When a new policy is taken out we always ask for copy documents for our files, i.e. copy driving licence, car documents and proof of no claims bonus.  Sometimes clients overlook the need to send them but they are necessary and recently having had an audit find many clients that haven’t sent us their documents.  When we organise renewals from now on we will check to see what we have on file and we will be chasing for any outstanding documents.

Renewals and cancellations.  
We will contact you, normally by email (or phone) at least 2 weeks before your renewal is due.  We look at the cost of your renewal and check with other companies to compare costs and cover.  If we find a better alternative we will offer it to you.  Liberty Seguros car and home insurance policies offer an automatic renewal system.   This means that the policy will automatically renew unless we inform Liberty to cancel it.  On occasions we cannot contact clients, even if we send an email or telephone them we are unable to contact them.   On these occasions we are unable to cancel a policy without written confirmation from the client.  Therefore a policy will renew automatically with payment either paid through by direct debit or pending receipt of visa or mastercard details.

Most of our clients do respond but for the few that don’t, we would greatly appreciate confirmation so that we can mark our files and save any unnecessary confusion in the future

Inheritance Tax update
Who must pay IHT?.  The heirs and the legatees have to pay IHT.  The heirs receive the general estate, but the legatees have a prior right to receive specific goods from the estate without being heirs.

Legal situation before 2015:  The applicable tax law was dependant upon tax residence of the involved parties.  For resident heirs, Andalucian IHT legislation was applicable, for non residents in Spain Governmental IHT was applicable.
Example:  Estate composing of House with a value of 200,000 euros and bank account of 50,000 euros.  Both Testator and his wife are residents in Andalucia.  Estate is passed between late husband and his wife.
IHT for residents in Andalucia:
- House value is reduced by 99.99% = no IHT.  All values up to 175,000 euros are free of IHT.
No IHT for the wife

IHT for non residents in Spain:
- Total value of estate 250,000 euros.  Reduction for direct family relation – 16000 euros. 
- remainder of value of estate 234,000 euros.

IHT would be approx. 38000 euros for the wife.

The European Supreme Court filed in 2014 that the distinction made by Spanish Tax authorities is illegal and contrary to European Legislation.  In consequence:-

  • Change in the law is required immediately and overpaid IHT must be repaid to tax payers.
  • The Andalucian tax legislation will be applicable now to all the assets located in Andalucia whether you are tax resident or not.
If you have paid IHT in the last 4 years, live in Andalucia, whether resident or non resident you may be able to claim this back.

How to avoid or reduce IHT

  • IHT runs out after 4.5 years after death of testator
  • Assets can be passed over to children at lifetime, dislocate part of the estate into other European countries with lower IHT.
  • Real estate properties can be bought in the name of children, saving the right of usufruct of parents which allows them to use the property during their lifetime
  • Future heirs can be registered as co-owners of bank accounts etc.
This information has been given Christian Hofer of RCH Legal.   Christian is part of our Business 1st Group of professionals who meet twice a month.  If you have paid IHT in the last 4 years as a non resident in Spain and need to clarify if you can make a claim give him a call on 952812761 or email him at  
  For all your insurance needs or queries regarding your existing policies please do not hesitate to contact us.
952 830 843 /  676 098 464 

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