For all of the country’s history, insurance in Costa Rica has been the exclusive provenance of a single, public insurance monopoly, the Instituto Nacional de Seguros(National Insurance Institute) commonly known as INS (pronounced “eens”). For the moment, that’s still the case, but the situation is in the process of changing. The Central American Free Trade Agreement with the United States (CAFTA) required members’ to allow private competition in the insurance sector, and so in 2008, Costa Rica changed the law to open the insurance market to private competitors. So far, the effects of this change have yet to be seen, as regulators draw up rules and foreign companies sniff around to consider investing. INS, meanwhile, is preparing for the competition by expanding its offerings and improving customer service.

For the time being, INS is still the entity that offers home insurance, and for the foreseeable future it will probably remain the largest player in the market, and indeed, Central America. There are lots of INS brokers all over the country, but by far the most popular with expatriates and foreigners is David Garrett, an English-speaking insurance agent based in San José and with an office in Miami. Thanks go to him, as well as to the excellent INS Web site, for the information in this chapter. Rates are products will very likely be vastly expanded in the near future, but in the meantime, the following information applies to INS products only.

HOME THEFT COVERAGE

This policy covers the contents of your home, a list of which you provide to INS when you sign up. Garrett advises that you list everything, not just the high-risk items. This list will include the current estimated market value – that is, how much you would have to pay to replace the same, used item. Value should be in colones, next to each item, and with annual inflation in the double digits, it’s a good idea to update the market values regularly. Also, keep the list updated by removing items you no longer own.

The premium for this product ranges from as low as 0.75% to 1.5% annually, depending on the location of your property and the level of security. A 13% sales tax is added to the price, and claims come with a 50,000-colón ($100) or 10% deductible. INS products have a lot of cumbersome caveats supposedly designed to reduce fraud, and home theft coverage is no different. If you are going to be away from your home for more than 48 hours, you must alert INS in writing a week in advance, as well as hire a guard to watch the property. In the event of a break-in, you should notify your agent as soon as possible. To get a payout, there must be evidence of the break-in; lost items will not be included in any payout. The insurance also covers the break-in damage, but it doesn’t cover vandalism, which is covered by the Home Fire and Natural Disasters insurance.

In the unfortunate event your house is broken into, the first step is to visit your local OIJ (pronounced o-ee-hota, or the Organización Investigación Judicial) office. The officer on duty will fill out a form describing the event and detailing stolen items. The report will contain an official stamp. Be sure to get a copy to pass to your INS agent. If you don’t speak Spanish, take someone with you who does. The report will go much smoother. In many parts of Costa Rica, especially in the more rural areas, there are very few investigative police on duty, simply because there aren’t enough to go round. Expect to wait in line. Once the claim is filed with your agent, it takes roughly 60 days for the payment.

HOME FIRE AND NATURAL DISASTERS

There are four categories in this area and they can cover homes, their contents, or both (the following terms apply only to single-family dwellings, not commercial properties).

A: Fire and lightning

B: damage caused by mutiny, strike, vandalism, hurricane, cyclone, explosion, smoke, falling objects, vehicles and resulting fire.

C: damage caused by floods and landslides.

D: natural disasters, earthquakes, tremors, volcanic eruptions, tsunamis etc.

C and D are usually sold by the package. Follow are the costs of other combinations, given as the percentage of the value of the insured property paid out annually. Talk to your agent for more details.

A: 0.0672% (of the value of the house.)

A + B: 0.0896%

A + CD: 0.2212%

A +B + CD: 0.2436%.

These percentages do not include the 13% sales tax for the coverage you choose. The insurance company will establish the value of your property by doing its own appraisal. They use what’s known as depreciated new value, which takes into account the estimated cost of rebuilding the property, less 2% in depreciation for every year a wooden house has been standing, and less 1% for masonry houses. INS uses a construction index to take into account the rising cost of construction materials and update the value of insured properties annually, a particularly relevant detail considering the rapid rise of building costs in Costa Rica in recent years.

To insure the contents of your home against damage, you need to make a basic list, itemizing only the articles worth at least $750.

Deductibles are the following:

A: NO deductible

B: 20,000 colones per claim, or 20% if the damage is due to a hurricane.

CD: 1% of total insured amount, with minimum co-payment of 50,000 colones

Check regularly for changes in deductibles. Claims need to be presented within five days of the event (see Chapter 18, reference section for contact details for insurance brokers INS.)