The Buying Process
Protecting the Investment
Insurance
As in anywhere else in the world, Murphy's Law applies in Costa Rican real estate. Fortunately there is excellent home owners insurance options to suit each and every property owners needs and desires for protecting their investment. Costa Rica is much safer than anywhere else in Latin America. Crime rates are low, education is high and there are no hurricanes due to the low latitude! Fires, burglary and natural disasters naturally will take place some where within the country. If it happens to you, it is vitally important to be prepared.
Insurance is an easy commodity to find. The national insurance company is the only insurance company. You do need to find your own broker to be your point man for any claim that you need to make so make sure that he or she is some one you can trust.
Insurance is optional, but recommended. Liability coverage is available in Costa Rica so that if some one is hurt or has an accident on your property you can be covered.
Home, fire and natural disaster policies are more likely to be drawn on and therefore more important to have. It covers the residents and the belongings inside. This type of insurance only covers single family homes. If you rent your house, the tenant is responsible for care of the houses furnishings and the landlord insures the actual house. Included in this insurance are four sub-coverages:
- A covers fire and lightning
- B covers mutiny, strikes, vandalism explosion, falling objects, smoke, vehicles and hurricanes
- C covers rain damage like land slides and flooding
- D covers other natural disasters like earthquakes and volcanoes
Coverage A can be opted for on its own. C and D must be sold together.
Your premium is based on the total value of the items you are insuring. As the insurance policy holder, you dictate the figure that the insurance company will use. For full coverage it costs 0.24% of the value of the house per year. This number is taxed at 13% so the total cost for insurance will be 0.275%
Deductibles are constant for Costa Rican home owners insurance. For coverages C and D, the deductible is 1% of the total value of all things insured of 50,000 colones, whichever is higher. For coverage B the deductible is 20,000 colones.
Home theft insurance in Costa Rica covers items that are stolen from inside the house. The rules for obtaining this type of insurance is strict in Costa Rica. The build of the house must have sturdy construction, all doors to the outside must have deadlocks and all windows must have bars. Theft insurance does not cover items like cash, portable electronics, precious metals and other jewelry, firearms, pets and cars. The INS requires that to obtain this insurance you you must submit a detailed and itemized list of household possessions.
