Insurance for Expats in Brazil

Submitted: May 2014

Fundamentally, insurance is mainly a financial service which is designed to reduce risks. An insurance product transforms the cost of your potential large liabilities or expenses into regular premiums. An insurance product “ensures” that your situation is more stable/less risky than what it would otherwise be, but it is certainly not a way to evade the liabilities you are potentially responsible for.

Do not wait for problems to arise before reviewing your insurance arrangements. Once you have a problem, it is already too late. Being poorly insured is risky whereas being over-insured is expensive.

If you are unclear about your cover or your needs whilst you are in Brazil, you might wish to check your existing insurance arrangements in your country of origin. This is important if you want to avoid double coverage.

Insurance isn’t necessarily a country-specific issue, but how much insurance you need may vary from one country to another. This is because your potential liabilities, such as medical bills, are specific to a jurisdiction.

Insurance market in Brazil

Traditionally, insurance policies in Brazil have been sold by banking corporations, with very strong broker’s commissions (more than 20%) and administrative costs. Needless to say, this poses serious affordability problems for Brazilians and expats.

However, the market has been gradually opening up in recent years, with many foreign insurers getting licences to carry on business in Brazil. This market liberalisation was to some extent reversed in 2011, and many foreign insurers are expected to go out of business as result.

Over the long run, this increased competition between insurance firms means that you should compare what’s available on the Brazilian market before taking out an insurance policy (premiums, levels of coverage, no-claims discounts, etc.). It’s also good to check the financial strength and the reputation of your insurer.

Home insurance

Your home insurance needs depend on whether you own your home, or if you rent it.

For homeowners, your home insurance policy protects you against damage to your building, and is generally required to secure a mortgage. This may cover the costs of rebuilding your property from scratch, legal fees or the costs of certain exceptional repairs. Home insurance may also cover you against third party liability if an accident happens in your home. Do also expect home insurance to be a requirement if you intend to apply for a mortgage.

For tenants, home insurance can be much cheaper than home insurance, as tenants only need to be insured against their belongings and public liability if an accident happens in their home.

As for all insurance policies, it is up to you to decide how generous you want your cover to be, what the excess amounts are, which unexpected expenses are covered (e.g. alternative accommodation), etc.  If you are letting your property, homeowner insurance may also be used in order to be insured against losses of rents.

Home insurance exclusions

In Brazil, there are some risks that you cannot be insured against with a standard home insurance policy. These include war, natural disasters or general dilapidation. If you really wish to be insured for this, a separate policy might be needed.

Going away from home

If you expect to be away from your home for more than one month, you should let your insurer know. Failure to do so may result in a claim being rejected if something happens to your home whilst you are away.

Car insurance

A majority of Brazilian drivers are uninsured, with old cars. Car insurance affordability is certainly an issue, but poor law enforcement is a factor as well.

Brazilian law requires all drivers to have car insurance, i.e. car insurance must include at least third party cover. This should insure you against potential liabilities for third party death or bodily injury, but not damage or theft of your own car. If you need your vehicle to have more than just third party cover, you might wish to take out a comprehensive vehicle insurance policy.

Brazilian insurers have been reported to do little risk-profiling until quite recently. However, your insurer is more likely to charge you lower premiums if:

Health insurance

Private health insurance in Brazil is essential for expatriates, if not made mandatory by the immigration rules. There is public healthcare system that is meant to provide free treatment for all residents. However, standards in public hospitals may leave to be desired, although gradual improvements have been reported.

Expatriates may consider an international cover in order to ensure coverage both in Brazil and in their home country. International covers tend to be more expensive, but they are straightforward and very helpful if you need to “bridge the gap” between Brazil and your home country. Expats who frequently move across borders are more likely to need an international cover to achieve peace of mind.

Life insurance

Life insurance can be particularly helpful if your family is financially very dependent on you, as it may guarantee a lump sum payment to your family if you die. Brazilian insurers often sell life insurance in the same package as private medical insurance.

Do assess carefully the burden of retaining foreign life insurance while you are resident in Brazil. Do also check the geographical extent of your existing life insurance policy when you move across borders.

Business insurance

If you run a business in Brazil, you probably need personnel insurance and public liability insurance.

Personnel insurance protects you in case one of your employees has an accident or an illness in connection with his/her employment duties.

Public liability insurance covers you against certain third party claims against your business. This may also include legal costs.