What's the cost of homeowner's insurance in Nicaragua?

I do not know anybody here who has homeowner’s insurance in Nicaragua. From a philosophical point of view, I think North Americans have been made to believe or feel that they have to insure everything – their lives, homes, pets, their airline ticket (in case they get sick and cannot make the flight). They even have reinsurance to insure their insurance. We insure properties in North America for loss or damage of course but I think more importantly, we insure our properties in...

I do not know anybody here who has homeowner’s insurance in Nicaragua. From a philosophical point of view, I think North Americans have been made to believe or feel that they have to insure everything – their lives, homes, pets, their airline ticket (in case they get sick and cannot make the flight). They even have reinsurance to insure their insurance. We insure properties in North America for loss or damage of course but I think more importantly, we insure our properties in North America for personal liabilities.

 

For example, if someone slips in front of your house in the US, they are going to sue you for everything that you own because they slipped and fell on a rock that was on a sidewalk or an acorn from a tree fell on your property and they slipped on the acorn and broke their ankle. Now they want a hundred million dollars from you. That kind of mentality does not exist down here in Nicaragua. Nobody talks like that. If that kind of thing happens to me here in Nicaragua, I am not going to sue the property owner for what happened because there is no damage insurance here. He might pay for the doctor’s fees and for the caste but that is all. There are definitely no charges due to loss of wages or for mental anguish. None of that exists down here.  We do have hurricanes, earthquakes, or volcanic eruptions and homes get damaged because of them but even with these events, people do not buy home insurance.

 

As of last year, First American Title no longer offers title insurance in Nicaragua because they cannot keep an office here since homeowner’s insurance is something that people here don’t buy. I built 25 homes in Nicaragua in the last ten years and only one had title insurance. I have sold dozens of real estate and out of those, only two have title insurance. Home insurance is available here through two or three Nicaraguan insurance companies but very few North Americans buy home insurance because we are not suing each other and we are not trying to get compensation above and beyond the simple cost of an accident or damage.

The average homeowners’ insurance in Nicaragua is around US $250 to $300 a year. It’s very small. The national banks require property owners to have homeowners’ insurance. The insurance policies may be different than US policies, but there is homeowners insurance here in Nicaragua.
 
Homeowners insurance in Nicaragua typically covers natural disasters. Nicaragua is a country where natural disasters are pretty frequent, such as high tides, earthquakes, the...

The average homeowners’ insurance in Nicaragua is around US $250 to $300 a year. It’s very small. The national banks require property owners to have homeowners’ insurance. The insurance policies may be different than US policies, but there is homeowners insurance here in Nicaragua.
 
Homeowners insurance in Nicaragua typically covers natural disasters. Nicaragua is a country where natural disasters are pretty frequent, such as high tides, earthquakes, the monsoon season, and so forth. If you are financing property here in Nicaragua with the banks, they require homeowner’s insurance and that is always available to people who own property outright as well.

 

(To get to the summit of the very symmetrical Momotombo Volcano in Nicaragua, one needs a permit to go past the geothermal power plant and cross the ever changing avalanche paths, pictured.)

The cost of Nicaraguan homeowners insurance policy is generally based on three variables; value of the house (less land), type of construction, and the location.

 

For example, a colonial house with an insured value US $150,000 in Leon, made of adobe, would cost from $750 to $1100 annually. The same value house in Managua made of reinforced concrete may cost $450 to $600 annually.   Same value house on the Pacific side of Nicaragua would cost $550 to $700;...

The cost of Nicaraguan homeowners insurance policy is generally based on three variables; value of the house (less land), type of construction, and the location.

 

For example, a colonial house with an insured value US $150,000 in Leon, made of adobe, would cost from $750 to $1100 annually. The same value house in Managua made of reinforced concrete may cost $450 to $600 annually.   Same value house on the Pacific side of Nicaragua would cost $550 to $700; depending on the proximity to the high tide water mark.  

 

There are five National insurance companies in Nicaragua offering homeowners coverage. It’s worthwhile to get quotes from all five as they use different pricing strategies (as noted above) depending on the property type and location.

 

Other cost factors to a Nicaraguan homeowner’s policy are a 2% policy fee, 1% tax used to support fire prevention and the 15% sales tax, both of which are added to the net premium.

 

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Since building codes are less stringent here in Nicaragua all homeowner policies are individually underwritten by the insurance companies. Unlike State Farm or Allstate, back home, automatic Underwriting/Binders do not exist in Nicaragua. That means that the property is not insured until it’s inspected and approved in writing.