Car insurance in Portugal

There are many things to consider if you’re moving to Portugal and driving a vehicle – tax, registration, having a valid license, and, of course, insurance. As with many other countries, it is illegal to drive an uninsured car on Portuguese roads. However, you are free to choose your own insurer and level of insurance.

Learn more about car insurance in Portugal, including:

Car insurance in Portugal

Portugal is similar to many other countries when it comes to car insurance. In other words, it is mandatory to take out a minimum coverage of third-party insurance. On top of this, you can choose to cover risks to protect yourself and your own car if you choose to.

Car insurance in Portugal is the second largest non-life insurance after health insurance, accounting for a 36% market share. You have to insure the vehicle rather than the driver, meaning that you will have to take out additional insurance if you drive multiple vehicles. However, others will be able to drive your car if they have a valid license.

The Insurance and Pensions Funds Supervisory Authority (Autoridade de Supervisão de Seguros e Fundos de Pensões – ASF) regulates car insurance in Portugal, as it does with all forms of insurance.

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Can you use car insurance from another country in Portugal?

You can use car insurance from other EU/EFTA countries in Portugal. In addition to this, other countries that are part of the Green Card system can use their home coverage in Portugal. Likewise, you can use Portuguese car insurance abroad in EU/EFTA and other green card countries.

Car insurance companies in Portugal

There are 76 insurance companies in Portugal, many of them supplying car insurance. The main firms include:

• Ageas
• Allianz
• Fidelidade
• Santander

You can also shop with a number of English-speaking companies providing expat car insurance or brokerage services. These include:

• Essencial Portugal
• Inov Expat
• GED Insurance
• Sterling

You can compare car insurance in Portugal using a comparison tool such as Compare o Mercado (in Portuguese).

Types of car insurance in Portugal

There are three main types of car insurance in Portugal. These are:

Third-party car insurance

Third-party car insurance (seguro obrigatório de responsabilidade civil automóvel) covers damage and costs to third parties including vehicle damage, injury costs, and personal property damage. However, this policy will not cover any of your own costs. This is the minimum legal car insurance requirement in Portugal and it must cover at least up to €6 million in personal injury damages and €1.22 million in material damages. It is best suited for older or cheaper vehicles. You can typically buy extra ‘add-on’ insurance to supplement this policy and cover some of your own costs.

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Third-party extra insurance

Third-party extra (seguro intermediário) is an intermediate insurance that is essentially third-party coverage plus some protection towards your own vehicle. Typically, this will be for fire damage, storm damage, and theft of vehicles, but policies vary between insurers so check first. Some policies also cover legal costs in the event of a claim going to court.

As with third-party coverage, you can usually tailor this insurance with supplementary policies. It is a good policy if you have a car between 4-10 years old.

Fully comprehensive car insurance

Basically, fully comprehensive car insurance (seguro contra todos) is insurance against all risks. This typically covers all costs for yourself and any third parties, even when the accident is your fault. Fully comprehensive coverage is a good option if you have a brand-new or expensive car, although bear in mind that premiums will be (way) higher.

You should also be aware that, although this policy is all-risk, there are exclusions. These usually include deliberate damage to the vehicle and accidents that occur if you are in violation of Portuguese driving laws, for example driving while drunk.

Car insurance costs

The cost of premiums in Portugal depends on a variety of factors. These include:

• Age and value of the vehicle
• Driver profile: age, driving record, claims history
• What you will use the vehicle for, e.g. personal use or work use
• Any other risks associated with your driving, for example where you live in Portugal.

Costs rise in accordance with the level of insurance you choose, too. Third-party insurance premiums start at around €150 a year, third-party extra at around €200 a year, and fully comprehensive at €350 a year. However, you will probably pay much more if you have an expensive car or a poor driving record.

Portuguese car insurance policies don’t come with a deductible (the amount you have to pay towards your first claim) as a standard. However, many all-risk policies include deductibles. You can also usually negotiate your contract and reduce your premium costs if you agree to pay a deductible.

You can find cost calculators on many of the Portuguese car insurance websites, such as Abbeygate’s.

Additional forms of car insurance in Portugal

Many companies offer additional supplementary policies that you can add to your standard insurance for an increased premium if they are not part of your standard coverage. These can include:

• Breakdown (avaria) – covers costs of repairs and a replacement vehicle if you break down on a journey.
• Windshield (para-brisa) – separate coverage for windshield and auto glass, which is sometimes excluded from standard policies.
• Lost keys (perda dos chaves) – covers the cost of replacing lost or stolen keys, with some extended policies also covering replacement vehicle costs.
• Travel assistance (assistência em viagem) – package often sold in Portugal that combines breakdowns, windshield damage and lost keys.
• Severe accident (divída segura) – covers costs associated with debilitating injuries or death due to a road accident.
• Professional driver insurance (condutor profissional) – this covers you if you use your vehicle for work or business purposes.
• Drivers abroad (Portugueses no estrangeiro) – provides coverage for Portuguese residents if driving abroad in a country not part of the Green Card system.

Car insurance bonuses and penalties in Portugal

Similar to many other countries, Portugal has a system of favorable insurance rates to drivers who haven’t made claims through a no-claims bonus system (Prémio Bonus Malus). Companies often offer discounts that can increase annually, up to a maximum of between 20–50% depending on the company. However, not all insurers offer the Prémio Bonus Malus, so check this before committing to a policy.

You can also usually transfer no-claims bonuses earned in other EU/EFTA countries, which is great news for careful (and lucky) European drivers. These bonuses are also usually valid if you switch insurers in Portugal; however, you will probably transfer to the new company rate.

While no-claims periods can earn you generous discounts, a history of insurance claims or a poor driving record can see your premiums increase. Expect to pay higher than average rates if you:

• have been involved in a road accident where you were at fault
• have points on your license for violations such as speeding or driving under the influence
• are a young or inexperienced driver

How to choose car insurance in Portugal

You should give careful consideration to a range of factors when choosing car insurance, rather than just plumping for the cheapest premium. Things you might want to consider include:

• No-claims bonus – is this offered and what kind of bonus ca you earn?
• Policy coverage – what are the exclusions and can you add them on if you need them? At what price?
• Level of payout – in the event of a claim, how much is the company likely to pay?
• Company reputation – how does the company rate on review sites and what is the customer feedback like in terms of customer service and whether it delivers on promises?
• Claims process – how easy and convenient is it? For example, can you claim online?
• Ethics – how well does the company score in terms of ethics, sustainability and corporate social responsibility (CSR)? You can check performance ratings on sites such as CSR Hub and EcoVadis.

Applying for car insurance in Portugal

Applying for car insurance in Portugal can usually be done over the phone, online or in-person at a local branch. Most large companies have quote forms that you can fill in online. With some, you can take the policy out online. Others will put you in touch with a local agent to proceed.

Each company has its own process but you will typically need to provide:

• Valid driving license
• Vehicle registration document, as you need to register you car in Portugal before you can insure it
• Your NIF number
• Portuguese address
• Bank account details
• Your driver profile, including claims history
• Inspection certificate, if the vehicle is more than four years old

With most companies, you can take out an insurance policy straight away, as soon as you make the first payment. You should then receive:

• your green card insurance certificate (which you should keep in the car)
• claims forms
• an insurance disc (which you should place in your car window)
• an information pack with details about your policy.

How to make a car insurance claim in Portugal

Each company has its own claims process which it should clearly explain to you when you sign up for a policy. In general, you will need to file your claim either online, over the phone, or using a paper form. Claims usually need to be filed within eight days, unless there is a good reason for a delay.

In the event of an accident, you will need to get the details (name, address, car details, and insurance policy number) from any third parties involved and complete your claim form. This is the DAAA (Declaração Amigável de Acidente Automóvel) form if the claim is straightforward, or the non-friendly claim form (Não Amigável) if events are contested. It is also a good idea to photograph any damage. If the accident is serious or people have been badly injured, call the emergency services. In these cases, the police will issue a report.

Your insurer will usually assign you a claims manager who will keep you updated on your claim. Most claims get resolved within a few weeks if they are straightforward. If there are complications and additional information is needed, they can take a little longer.

Canceling a contract or changing provider

Cancelation policies and procedures vary between insurance companies in Portugal. Policies typically last for a year and may automatically renew if you don’t cancel within the notice period. Check your contract for details for this (typically it’s between 1-3 months).

If you want to cancel midway through your contract, you will usually have to give a minimum notice period. Your insurer may charge you an exit fee unless you have a valid reason for canceling. Acceptable reasons include if you are unhappy with the way your insurer handles a claim or if your premium increases.

With most Portuguese insurance companies, you need to cancel the policy in writing. This may be via letter, email, or online form, depending on the company procedures.

Making a complaint about a car insurance company in Portugal

If you want to complain about an insurance company in Portugal, you should first contact the internal complaints department of your insurer in writing. The company should inform you of its complaints procedure when you take out your policy.

If you are dissatisfied with the outcome of this, or if you don’t receive a response, you can take your complaint to a Customers’ Ombudsman (Provedor do Cliente das Empresas de Seguros). In Portugal, all insurance companies are legally required to appoint independent, external, Customers’ Ombudsman. The contact details will be available in your contract and online. You can take your complaint to an ombudsman if you have not received a satisfactory response to your claim within 20 days.

The ombudsman will try to resolve your complaint within 30 days. After this period, if you are still unhappy with the outcome, you can approach the ASF complaints service.

Roadside assistance in Portugal

You often get breakdown assistance coverage in Portugal included in your car insurance package, especially if you have fully comprehensive insurance. Another option is to join a membership club such as the Automobile Club of Portugal (Automóvel Club de Portugal – ACP). This is similar to the AAA in the US, or the ANWB in the Netherlands.

ACP membership can be as little as €4 a month. Benefits include roadside assistance and repair insurance across Europe and the Mediterranean, as well as free advice on traffic laws and a number of other perks.

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Useful resources

• Insurance and Pensions Fund Supervisory Authority (Autoridade de Supervisão de Seguros e Fundos de Pensões – ASF) – insurance regulator in Portugal
• Automobile Club of Portugal (Automóvel Club de Portugal – ACP) – membership automobile club that provides breakdown assistance as well as other services
• Compare o Mercado – comparison website (in Portuguese) where you can compare deals for insurance and other products