Mandatory insurance for short-term rentals in Portugal

It is the cheapest obligation to meet and the one whose failure costs the most. Worth dealing with this week, especially if you do not know where your certificate is.

What insurance is mandatory?

Public liability insurance covering material and non-material damage caused to guests and third parties through the activity, with minimum cover of €75,000. The requirement sits in Decree-Law 128/2014, which sets the legal regime for operating alojamento local establishments.

The policy must be in force throughout the operating period and kept up to date.

Why this became urgent

Because it stopped being a filed formality. In Lisbon, roughly 6,765 registrations were cancelled for missing proof of insurance. This is not a fine: it is cancellation of the registration, which makes operating illegal and forces the listings down.

If your registration is active and you cannot say where the certificate is, you probably have a problem.

Home insurance is not enough

This is the most common mistake. Three different policies, three different covers:

Some insurers allow an extension of home insurance to alojamento local activity. That is acceptable, provided the policy expressly names the activity and the minimum cover. A generic family liability extension does not qualify.

What to check on the policy

1. Minimum cover of €75,000 for public liability.
2. Express mention of alojamento local activity, not merely of letting.
3. The exact address of the establishment, matching the registration.
4. Cover for damage to third parties, not only to guests.
5. A validity period covering the whole operation, with renewal confirmed.
6. The certificate saved as a file, ready to produce — that is what gets asked for, not the whole policy.

How it works with a management company

These are two separate policies and both must exist:

• The registration holder's mandatory insurance, which is yours and cannot be transferred.
• The management company's professional liability cover, which covers its own acts — damage caused during a clean, for instance.

A management company that tells you its cover removes your obligation is wrong, and that answer says something about the rest of the service.

What to do this week

1. Find the insurance certificate for your property.
2. Check the cover: it must be €75,000 or more.
3. Check the policy names alojamento local activity and the correct address.
4. If you find nothing, call your insurer today. Taking out the policy is quick and the annual cost is modest against the risk of losing the registration.
5. Store the certificate wherever you keep the RNAL registration.