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Every building in horizontal property in Portugal must be insured against fire, but the law does not say how. Each owner can insure their own unit, or the condominium can take out a single policy for the whole building. Collective condominium insurance is the second option, and it has clear advantages when something goes wrong in several flats at once. In this guide we explain what the law requires, how collective and individual cover differ, the four main reasons to choose a single policy and what to check before the general meeting votes.
In short
- The law requires units and common parts to be insured against fire (article 1429 of the Civil Code).
- With individual insurance, each owner insures their unit and their share of the common parts.
- With collective insurance, the condominium takes out a single policy for the building and splits the premium by permillage.
- The main advantages are a single contact, simpler loss assessments, control of the sum insured and the same cover for everyone.
- Before switching, the meeting should decide how to treat owners who already have individual insurance, for example linked to a mortgage.
- The sum insured must be updated every year (article 5 of Decree-Law 268/94).
Condominium insurance is a legal requirement
Yes. The Civil Code requires the building to be insured against fire, both the units and the common parts. The duty lies with each owner, but the law gives the administrator a role in checking and, if needed, stepping in:
«2 – O seguro deve ser celebrado pelos condóminos; o administrador deve, no entanto, efectuá-lo quando os condóminos o não hajam feito dentro do prazo e pelo valor que, para o efeito, tenha sido fixado em assembleia; nesse caso, ficará com o direito de reaver deles o respectivo prémio.» — Civil Code, article 1429(2)
In plain English: the owners must take out the insurance, but if they have not done so by the deadline and for the amount set by the general meeting, the administrator must do it and can then recover the premium from them.
The legal requirement covers fire only. Cover such as water damage, earthquakes or third-party liability is optional, although strongly recommended. Our article on making the best decision on condominium insurance explains what is compulsory and what is not.
Collective or individual insurance: what is the difference?
With individual insurance, each owner insures their own unit, including their percentage of the common parts. This is the most common model where there is a mortgage, because the bank requires the property to be insured.
With collective insurance, the general meeting approves a single policy, taken out in the condominium’s name, covering all participating units and the common parts. The premium goes into the annual budget and is collected with the service charges, according to each unit’s permillage.
| Situation | Individual insurance | Collective insurance |
|---|---|---|
| A burst in the shared riser damages 3 flats | Up to 3 insurers and several assessments | One insurer and one claim |
| Checking everyone complies with the law | Administrator asks each owner for proof | The building’s policy is enough |
| Sum insured | Each owner sets their own | A single amount approved by the meeting |
| Cover | Can vary widely between units | The same for the whole building |
4 reasons to choose collective condominium insurance
1. Simpler claims
When an incident affects several units and the common parts, collective insurance brings everything to one insurer. There is no need to work out where the damage started to know which policy pays, or to coordinate assessors from several companies. This reduces disputes between neighbours and speeds up repairs.
2. A single contact for the administrator
The administrator deals with one company, knows the cover and the excesses and can report claims affecting the common parts straight away. Remember that a claim must be reported within the period set in the contract or, if none is set, within eight days (article 100 of Decree-Law 72/2008).
3. A sum insured that is controlled and updated
With a single policy, the meeting sets the sum insured at the building’s rebuilding value and the administrator ensures the annual update required by law. In the individual model, it is common to find units with out-of-date sums insured, which can lead to reduced payouts.
«1 – É obrigatória a actualização anual do seguro contra o risco de incêndio.» — Decree-Law 268/94, article 5
In plain English: the fire insurance must be updated every year.
4. The same cover for everyone
In collective insurance, all participating units have the same cover. If the meeting approves a multi-risk policy with water damage and third-party liability, that protection applies to the whole building, without gaps caused by some owners’ minimum policies.
What about the price?
The premium depends on the sum insured, the cover, the excesses, and the age and condition of the building. There is no rule guaranteeing that collective cover is always cheaper. The only sound way to decide is to ask for comparable proposals, with the same sum insured and the same cover, and compare them with the total the owners already pay. Where insurance proposals are concerned, the meeting can and should ask for several before deciding.
Points to check before approving collective insurance
- Owners with individual insurance: many have the insurance required by their bank. The meeting should plan how to avoid double cover, for example by making participation voluntary or asking the bank to accept the building’s policy.
- Cover inventory: check that the new policy covers at least what the individual policies already did.
- Excesses: a high excess on water damage can make the policy of little use day to day.
- Contents: buildings insurance does not cover contents; each resident needs their own.
- Clear minutes: the decision should state the insurer, the sum insured, the cover and how the premium is shared. See how to write meeting minutes.
If you keep individual insurance
Individual insurance remains valid. If that is the building’s choice, follow three rules:
- Update the sum insured for your unit every year, taking into account the amount approved by the meeting.
- Send proof of the policy and payment to the administrator.
- Check the cover for the common parts in your policy.
If you do not, the administrator can take out the insurance and charge you the premium, as article 1429 provides.
How Condoroo helps
Condoroo manages more than 600 condominiums, including buildings with more than 300 units, with a team of more than 20 professionals. Every building’s bank account is in the condominium’s name, so the premium of a collective policy is paid from the condominium’s own account and shows up in the accounts presented to the meeting. Before each renewal, we check whether the sum insured has been updated.
Collective condominium insurance: frequently asked questions
Is collective condominium insurance compulsory?
No. What is compulsory is fire insurance for the units and common parts. It can be individual or collective; the choice is for the owners and the general meeting.
How is the premium of collective insurance shared?
As a rule, by each unit’s permillage, like the other common expenses under article 1424 of the Civil Code.
I have insurance through my bank. Must I join the collective policy?
The meeting should decide. Before approving, the condominium should plan how to avoid double cover for those who already have valid insurance, for example through voluntary participation.
Does collective insurance cover my furniture?
No, as a rule it covers only the building. For furniture and appliances you need your own contents insurance.
Who reports a claim under collective insurance?
The administrator, for the common parts. For units, the owner should tell the administrator straight away so the claim is reported in time.
How often must the sum insured be updated?
Every year. Decree-Law 268/94 makes the annual update of fire insurance compulsory.
This article is for information only and does not replace legal or insurance advice on your specific case. Legislation checked on 26 October 2026.
