Grace period for car insurance: everything you need to know

When we consider buying a car, we need to think about several things before making a decision: the brand, the model, the size, the colour, and so on. But it is also important to bear in mind that our new purchase, whether it is a new car or a used car, will be accompanied by a new obligation: taking an insurance. 

Car insurance in Spain is not only a matter of safety, but it is an obligation for all car owners. That is why in this article we will see the obligations of drivers regarding insurance and, also the responsibilities of insurance companies. Among them, we will talk about one of the most unknown features of car insurance: the grace period.

Compulsory insurance

As mentioned above, in Spain all owners of motor vehicles are obliged to take out and keep up to date civil liability insurance. This insurance would allow the owners of cars, motorbikes, and other vehicles to cover damages caused to third parties in the event of an accident.

Thus, when we talk about damages to third parties, we can refer to bodily injury or material damage. It is important to point out that this civil liability insurance does not cover the injuries suffered by the policy holder (i.e. the insured) or the damage to his own vehicle. Therefore, the insurance policy only covers the damage that the assured has caused to third parties.

What happens if I do not have compulsory insurance?

First of all, it is important to be clear that according to article 3 of Royal Legislative Decree 8/2004 of 29 October, driving on public roads without insurance is strictly forbidden. In case of doing so, the owner of the vehicle could face fines ranging from 600 euros to 3000 euros.

You should also be aware that the penalty is not only financial. If the police detect a car driving without insurance, the vehicle will be immobilised, and it will have to remain in a depot for a certain period. This means that, in addition to having to pay the fine, you may not be able to use your car for at least a couple of months. 

What happens if I have an accident with my car?

In the unfortunate event that you have an accident with your car, this compulsory insurance covers damages to third parties, as mentioned above. Anything that exceeds this coverage, such as personal injury to the driver or damage to the policy holder's car, must be borne by the policy holder himself.

In case of not having the insurance, the corresponding fine for not having it would fall on the owner of the car, regardless of whether he/she was the driver of the vehicle at the time of the circulation. 

In terms of liability, it is important to clarify that in the event of an accident, whereas the driver will be criminally and civilly liable, the owner of the vehicle will always be civilly liable.

Last but not least, in the absence of compulsory insurance, in addition to the fine, the owner will pay for the damage caused to third parties out of his own assets. No need to risk anything of this. Get your quote for car insurance and get the best price for expats.  

Do I have to always carry the policy with me?

Once we take out this compulsory insurance, many drivers believe that the most appropriate thing to do is to carry the policy in the glove compartment so that it is always at their disposal. This is a valid option, but nowadays, it is not the only one.

For those who are more comfortable with the use of technology, there is an alternative to paper. There are many insurance companies that offer their own mobile apps, in which the user can always have their policy available, and thus, they are able to know what coverage they have or check if they are up to date with the payment schedule of the policy.

Even if you don't have your policy payment receipt at hand, you don't need to worry. In the event that the authorities need to check the validity of the policy, they will be able to do so through the FIVA (Fichero Informativo de Vehículos Asegurados) so they will not depend on the documents that you have with you at the time of the control.

About the payment of the policy

The payment of the policy is normally made annually, in other words, in advance. By paying the agreed annual amount, the vehicle owner can rest assured that they are covered and that they are fulfilling their obligation. 

Alternatively, some companies offer their customers to pay in instalments, with monthly payment being the most common option.

The grace period insurance

This is one of the least commented aspects when it comes to contracting and comparing different insurance companies. So, what is grace period insurance?

The grace period is a period of time during which your car will still be covered even if you have forgotten to pay the premium and it is overdue. This means that if you have an accident with an expired policy, during the grace period you cannot be fined for not having the compulsory insurance, as the company is obliged to cover damages to third parties during this period.

Generally, this period in Spain is about 30 days, meaning that if for some reason you have not been able to pay the premium, you will still be covered for the next 30 days. During this period, you will have to pay the premium if you wish to keep your car insurance active after those 30 days.

But you should be aware of the following too: When the policy expires, you will most likely have to reapply for it, and from that moment on, the conditions you enjoyed until then could change (increase in premium, change in coverage, etc.).

As you can see, civil liability insurance for your car is compulsory.  Having the policy up to date will help you avoiding headaches and you will feel safer when travelling, whether alone or with your loved ones. I hope this article has also helped you understand how grace period insurance works and that it has answered your questions. Remember that you can leave your questions or comments here. We will be happy to talk to you and clear up any doubts you may have. See you next time!