The new Alojamento Local laws for short-term tourist lettings includes an obligation for property owners in buildings covered by condominium legislation, to take out multi-risk civil liability insurance.
This might sound sensible, except this type of insurance does not exist, something the legislators failed to check out before publishing the decree law.
Deco, the consumer watchdog, stated today, "Law 62/2018, which came into effect on 21 October, obliges local housing owners to take out multi-risk civil liability insurance”
“There’s multi-insurance-housing, multi-crisis-insurance and multi-crisis-condominium insurance, but there is no multi-risk civil liability insurance, which shows a serious ignorance from the legislature on the matter being legislated," sighed Deco.
Deco said that the Portuguese Association of Insurers had confirmed the error in the legislation. The insurers crisply noted that, “This terminology has no correspondence in the technical and legal terminology of the insurance activity, whose legal regime of access and exercise shall expressly state the groups of classes or types of insurance which insurance undertakings may be authorised to exercise.”
Deco says the problem does not stop here, “In addition to the fact that there is no branch or type of insurance with this designation on the market, the law is also not clear about the damages that it wants to see covered, nor does it establish the need for any regulation for this insurance. In this way, owners are left without knowing what type of insurance they should buy, with what level of cover and with what minimum capital."
"In case of personal injury caused to third parties, it will certainly make all the difference between having an insurance with a capital of €10,000 and an insurance with capital of €50,000 or €100,000. With no minimum capital required, each owner can, in theory, buy what he wants," warns Mónica Dias, Deco Proteste’s insurance specialist.
Deco also points out that, "the law clearly refers to a penalty of ‘cancellation of AL registration’ for those who do not have valid insurance."
As the law stands at the moment, "any insurance that may be bought will not be what the law formally requires," according to the Portuguese Insurance Association, which already has warned MPs and the Government about the need to clarify the law.
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For the baffled, there is Nalle, an organisation set up to help those who wish to become compliant with the AL legislation: http://nalle.pt/
and there's afpop, of course: http://www.afpop.com
