Car insurance
Portugal

Car Insurance in Portugal for Expats

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Brenda L.
11/21/2024

10

min read

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As you move to Portugal, whether you're bringing your car or purchasing one in Portugal, understanding the intricacies of car insurance is critical for safety, legal compliance, and financial protection.

Explore the types of car insurance available, how they work, what influences costs, how to claim after an accident, and what you must know as an immigrant.

Let's take in consideration how is the mandatory insurance for automobiles in Portugal and how can you find the best solution for your needs.

Understanding mandatory Car Insurance laws in Portugal

Portugal mandates car insurance for any vehicle with access to public roads. This law applies regardless of whether the vehicle is in use or parked.

The primary purpose of mandatory insurance is to protect victims in the event of accidents and ensure they receive financial compensation.

1. Key Legal Aspects

  • Minimum Requirements:Third-party liability (Responsabilidade Civil) is the legal minimum.
  • Coverage must include €6,070,000 for bodily injuries and €1,220,000 for property damages.
  • Regulatory Authority:Insurance practices in Portugal are overseen by the Autoridade de Supervisão de Seguros e Fundos de Pensões (ASF), which ensures consumer protection and market regulation.
  • Fines for Non-Compliance:Driving without insurance leads to penalties, including:
  • Fines ranging from €500 to €2,500.
  • Confiscation of the vehicle.
  • Deduction of points from your driving license.

2. Unique Portuguese Requirements

  • Even if you’re the only driver using your car, it must be insured.
  • Vehicles not registered in Portugal but used in the country for over 6 months may need a Portuguese insurance policy, depending on EU cross-border agreements.

Types of Car Insurance in Portugal

Car insurance in Portugal falls into two primary categories, with options for add-ons based on individual needs.

1. Third-Party Liability (Seguro de Responsabilidade Civil)

This is the minimum legal requirement and the most affordable option.

  • Covers:Bodily injuries to others (pedestrians, other drivers, and passengers).
  • Damage to third-party property (vehicles, buildings, infrastructure).
  • Does Not Cover:Damage to your own vehicle.
  • Medical expenses for the driver at fault.

2. Comprehensive Insurance (Seguro de Danos Próprios)

This is an optional but extensive coverage policy that includes everything in third-party insurance and additional protections.

  • Covers:Damage to your vehicle, regardless of fault.
  • Acts of nature (such as floods and hailstorms), theft, and vandalism also pose a threat.
  • Fire and explosions.
  • Driver and passenger injuries.
  • Add-Ons Available:Replacement vehicle during repairs.
  • Roadside assistance (in Portugal or internationally).
  • Legal assistance for disputes or claims.

3. Specific Coverage for Expats

Some insurers, such as Allianz, Fidelidade, and Ageas, offer tailored packages for expatriates. These include:

  • English-speaking customer service.
  • Simplified claims processes.
  • Coverage valid across the European Union.

Documents required to purchase Insurance

To obtain car insurance in Portugal, you’ll need to provide the following:

  • Personal Identification:Passport, residence card, or European ID, and a NIF.
  • Driver’s License:EU licenses are valid. Non-EU license holders may find insurers willing to accept your license, however it's recommended to exchange theirs for a Portuguese license within 90 days after receiveing you residence permit.
  • Vehicle Registration Documents (Certificado de Matrícula):Proof of ownership of the car.
  • Vehicle Details:Year, make, model, engine capacity, and current market value (if applicable).
  • Proof of Address:Utility bill, rental contract, or official residence document.
  • No-Claims Bonus Certificate (Optional):This certificate from your previous insurer can help lower your fee.

Cost of car insurance in Portugal

The cost of insurance depends on multiple factors, including the driver’s profile, the vehicle, and the type of coverage selected.

What can influence the price:

  • Driver’s Profile:Age and driving experience: Young or inexperienced drivers pay higher fees.
  • Accident history: A clean driving record results in discounts.
  • Nationality: Some insurers may charge differently for non-residents.
  • Vehicle Details:Make, model, and year: expensive or luxury cars incur higher prices.
  • Usage: Cars used for long commutes or commercial purposes cost more to insure.
  • Security features: Alarms and immobilizers can reduce fees.
  1. Location:
  • Urban areas like Lisbon and Porto: higher risk of theft and accidents, leading to increased prices.
  • Rural areas: lower risk, resulting in reduced rates.
  • Type of Coverage:Third-party insurance is the cheapest option.
  • Comprehensive insurance with add-ons significantly increases costs.
  • Franchise (Deductible):Opting for a higher deductible reduces premiums but increases out-of-pocket costs in claims.

How car insurance is calculated in Portugal?

Insurance companies utilize intricate algorithms to calculate fees, taking into account various factors.

  • Statistical Data: Based on accident rates, crime levels, and historical claims.
  • Driver Behavior: History of fines, speeding tickets, and previous claims.
  • Vehicle Value: Market depreciation rates are considered.
  • No-Claims Discounts: Each claim-free year can reduce premiums by 10-20%.

1. Choosing the Right Insurance

Portugal’s insurance market includes reputable providers such as:

  • Allianz
  • Fidelidade
  • Ageas
  • Generali
  • Tranquilidade

2. How to Compare Policies

  • Use online comparison tools like Seguros.pt or ComparaJá.
  • Consult expat forums on Reddit or Facebook groups for recommendations.
  • Request quotes from multiple providers to find the best price and coverage.

3. Negotiating better rates

  • Bundle policies: Combine car insurance with home or health insurance.
  • Pay annually instead of monthly to avoid installment fees.
  • Provide a no-claims bonus certificate from your previous insurer.

How to hire car insurance in Portugal?

When it comes to hiring car insurance in Portugal as an immigrant, you have two main options: going directly to an insurer or using an insurance broker.

Each method has its pros and cons, depending on your situation and familiarity with the Portuguese insurance system.

1. Going Directly to an Insurer

This is a straightforward option if you already know what type of coverage you need and feel confident comparing policies on your own.

Steps to Follow:

  1. Visit the websites of reputable insurers like Allianz, Fidelidade, or Ageas.
  2. Use online tools to generate quotes by entering details about your car, driving history, and desired coverage.
  3. Compare offers, focusing on price, coverage limits, deductibles (franquias), and additional services.
  4. Call or email their customer service teams if you have specific questions (many offer English-speaking support).
  5. Purchase your policy directly through their website or by visiting a local branch.

Advantages:

  • Quick Process: You can often secure a policy within a day.
  • Control: You deal directly with the insurer, with no intermediaries.
  • Online Discounts: Some insurers offer lower rates for online purchases.

Disadvantages:

  • Limited Options: You only see offers from the insurer you contact.
  • Complexity: Navigating coverage details and legal jargon might be challenging.

2. Using an Insurance Broker

If you’re unsure of the process or prefer someone else to handle the comparison and negotiations, an insurance broker can help. Brokers act as intermediaries, comparing policies from multiple insurers and tailoring advice to your specific needs.

Steps to Follow:

  1. Contact a licensed broker (either check companie's websites or request tips from other expats).
  2. Share details about your car, driving history, and what coverage you’re looking for.
  3. Let the broker provide you with multiple policy options from different insurers.
  4. Choose the policy that best suits your needs, and the broker will handle the paperwork.

⚠️ We are happy to recommend our partners at INOV Expat team. They will be ready to help you with any insurance needs.

Advantages:

  • Expert Guidance: Brokers explain policy terms and recommend the best options.
  • Saves Time: They do the comparison work for you.
  • Claims Assistance: Many brokers offer support in the event of a claim.
  • Expats Friendly: Some brokers specialize in working with immigrants and provide English-speaking services.

Disadvantages:

  • Broker Fees: Some brokers charge a commission or service fee.
  • Limited Insurer Pool: Brokers may only work with a selection of insurers.

Which Option is Better for You?

  • Go Directly to an Insurer If:
    • You’re comfortable researching and comparing policies.
    • You want the fastest, most cost-effective solution.
    • You have experience with car insurance and understand your needs.
  • Use a Broker If:
    • You’re unfamiliar with the Portuguese system and want expert advice.
    • You have specific requirements (e.g., expat-friendly policies, multi-country coverage).
    • You prefer someone else to handle the paperwork and comparisons.

If you’re unsure, start by comparing quotes directly online to get an idea of costs and coverage. If the process feels overwhelming, consult a broker to ensure you get the best deal and coverage for your situation. Both methods can lead to reliable coverage; it depends on your comfort level and how much time you want to invest in the process.

Will I need an Insurance Broker to hire a car insurance in Portugal?

Insurance brokers can be extra valuable when navigating Portugal’s car insurance market, especially for expats unfamiliar with the system.

Acting as independent intermediaries, brokers represent your interests and work to find the best policy across multiple insurance providers.

How Brokers Can Help with Car Insurance?

  • Policy Comparison: Brokers assess policies from various insurers, saving you time and providing a range of options.
  • Tailored Advice: They understand unique needs, such as expat-specific coverage or multi-country driving requirements.
  • Claims Assistance: Brokers offer support during claims processes, ensuring smoother communication with insurers.
  • Language Support: Many brokers provide services in English, simplifying the process for non-Portuguese speakers.

When to Use a Broker

Consider using a broker if:

  • You’re new to Portugal and unfamiliar with local insurance practices.
  • You have a complex insurance need, such as multiple drivers or vehicles.
  • You want to compare policies without navigating the market alone.

You can easily find a broker in facebook groups, requesting recommendations or directly at the insurance companies websites.

Working with a broker can streamline the process and ensure you get comprehensive coverage at a competitive price.

Special considerations for immigrants

1. Importing a Car to Portugal

If you’re bringing your car to Portugal, you’ll need:

  • Portuguese vehicle registration.
  • A valid inspection certificate, also known as the Inspection Periódica Obrigatória, is required.
  • Insurance coverage from a Portuguese provider.

2. Cross-Border Travel

  • Portuguese insurance includes a Green Card (Carta Verde), valid across the EU.
  • For non-EU countries, confirm coverage with your insurer.

3. Driving a Rental Car

If you’re renting a car, ensure the rental company provides adequate coverage. You might need additional insurance, such as Collision Damage Waiver (CDW).

What to do in case of a car accident in Portugal?

  1. At the Scene:
    • Take photos of the damage and the surrounding area.
    • Exchange details: Obtain names, contact information, and insurance details.
    • Identify witnesses and record their information.
    • Use the mandatory vest, that must be available in your car.
  2. Friendly Accident Statement (Declaração Amigável):
    • Fill out this standardized form (you'll receive one from your insurer) with the other driver.
    • Both parties should sign and submit copies to their insurers.
  3. Notify your insurer:
    • Report the accident within five working days.
    • Submit all supporting documentation, including the friendly accident statement and photos.
  4. Uninsured Drivers:
    • If the at-fault driver lacks insurance, report the incident to the police and file a claim through the Fundo de Garantia Automóvel.

Common Mistakes to Avoid

  • Underinsurance: Opting for the cheapest policy can lead to significant out-of-pocket costs.
  • Ignoring Add-Ons: Features like roadside assistance or legal protection can save money in the long run.
  • Not Reading the Fine Print: Exclusions and conditions can vary widely between providers.

Final words

Understanding car insurance in Portugal ensures you’re legally compliant and financially protected. By researching thoroughly, comparing options, and tailoring your policy to your needs, you can drive with confidence in your new home.

For personalized advice, consult insurance brokers. With the right coverage, navigating Portugal’s roads becomes a stress-free experience.

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