What Is the Ten-Year Insurance? 6 Essential Questions Answered

ARCHITECTURE

Apr 15

Written By Francisco Javier Muñoz Fuentes

Buying a home or building one from the ground up is, for many people, the project of a lifetime. But when it comes to construction, it’s not just about the house being beautiful, functional, or well laid out. What truly matters is that it’s well built and safe. And to protect that peace of mind, there’s an important guarantee you should know about: the ten-year insurance.

Yes, it sounds technical — but it’s more important than it seems. In this article, we’ll explain in simple terms what it is, what it’s for, when it’s mandatory, and why it’s essential for any new construction project.

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1. WHAT IS THE TEN-YEAR INSURANCE?

The ten-year insurance (seguro decenal) is a legally required insurance policy that covers material damage caused to a building due to structural defects or flaws that directly compromise its mechanical strength and stability. It is regulated by Spain’s Building Regulation Law (Ley de Ordenación de la Edificación or LOE).

This insurance provides the homebuyer with protection against serious construction faults that may not be detectable at the time of purchase but can appear over time and affect essential structural elements of the building.

2. WHEN IS IT MANDATORY?

According to the LOE, ten-year insurance is mandatory for all buildings intended primarily for residential use, as long as they are going to be sold. That is, if a developer builds a property with the intention of selling it, they must take out the policy before registering the property in the Land Registry.

For individual self-builders (autopromotores), it’s not required if they don’t intend to sell the property within 10 years. However, if they do decide to sell it before that period is up, they must either provide the insurance policy at the time of sale or obtain it retroactively—something that can come with added costs and complications in securing coverage.

3. WHAT EXACTLY DOES IT COVER?

The ten-year insurance doesn’t cover all types of defects. Its coverage is strictly limited to material damage affecting:

The foundation, structure, and load-bearing elements that compromise the building’s stability.
Defects that originate from or affect structural elements and endanger the building’s safety or livability.

It doesn’t cover aesthetic damage, finish defects, or maintenance issues. Other types of guarantees exist for those, such as the three-year insurance (seguro trienal) or the one-year completion guarantee, although these are not mandatory.

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4. WHO TAKES OUT THE POLICY?

Typically, the developer is responsible for purchasing the insurance—whether it’s a real estate developer or a private self-builder. In order for the insurer to issue the policy, a technical control body (Organismo de Control Técnico, or OCT) must be involved from the start of the construction. This body supervises the entire building process and prepares reports to ensure quality standards are met.

5. HOW MUCH DOES IT COST?

The cost of ten-year insurance depends on several factors: the size of the project, the type of foundation, the location of the land, the developer’s background, and the level of construction quality. As a reference, it typically ranges between 0.6% and 1.5% of the total construction cost, with around 1% being the most common.

It may seem like just another expense, but think of it as a long-term investment in peace of mind. If there’s a serious structural fault, the difference between having this insurance or not can easily amount to thousands—or even hundreds of thousands—of euros.

6. HOW DOES IT AFFECT THE DEVELOPER?

For the developer, the ten-year insurance represents an added cost, both financially and technically. However, it builds greater trust with buyers, makes properties easier to sell, and protects the developer from major liability claims.

Furthermore, in financed developments, banks usually require this insurance to approve the development loan and to allow individual mortgage signings.

If you have an architecture project in Málaga, at Munoz Barcia Architects, we’ll be happy to help you with all your questions. Feel free to give us a call—no obligation!

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