Costa Rica Property Insurance: A Complete Guide for Property Owners

Property insurance in Costa Rica works differently than in the U.S., Canada, or Europe. The good news: comprehensive coverage is straightforward, affordable, and includes protections that would cost extra elsewhere. The less good news: you’ll need to navigate a market that, until recently, was a government monopoly, and understand which coverages are standard versus which require add-ons.

If you own a vacation rental property in Los Sueños, Jacó, or anywhere else in Costa Rica, insurance isn’t just about protecting your investment. It’s about making sure a broken pipe, earthquake, or guest injury doesn’t turn into a financial disaster. This guide covers everything you need to know.

Legal Disclaimer: This guide is for informational purposes only and does not constitute legal or tax advice. Consult a qualified Costa Rican attorney or insurance professional before purchasing coverage.

The Insurance Landscape: INS and the Open Market

For most of Costa Rica’s history, property insurance was the exclusive domain of one entity: the Instituto Nacional de Seguros (INS), a government-controlled insurance monopoly. That changed in 2008 when the market opened to private competition.

Today, you have options. Companies like Oceanica, Lafise, Mapfre, and others now compete alongside INS. Rates are similar across providers, coverage is largely standardized, and most insurance brokers work with multiple carriers.

But here’s what matters: INS remains the most trusted and widely used insurer in Costa Rica. It has the longest track record, the most established claims process, and a reputation for reliability that newer entrants are still building. Unless you have a specific reason to go elsewhere, INS is the safe bet.

The other benefit of this market structure: you don’t shop around yourself. You work with an insurance broker who handles quotes, paperwork, and claims across all providers. The broker becomes your single point of contact, which simplifies everything.

Types of Property Insurance Coverage

Costa Rica property insurance breaks down into four main categories. You can buy them separately or bundled, depending on your needs.

Fire and Natural Disaster Policy (Coverage V + D)

This is the foundational coverage that protects your property’s structure. It combines two categories:

Coverage V (Direct Damage to Real Estate) includes:

Fire and lightning
Windstorms, hurricanes, cyclones
Falling objects (trees, debris)
Explosions
Smoke damage

Coverage D (Natural Disasters) includes:

Earthquakes and tremors
Volcanic activity
Floods
Landslides

Here’s where Costa Rica differs from many countries: earthquake, flood, and volcanic coverage are standard in comprehensive policies. You don’t need separate riders or specialty policies. In a country with active volcanoes and seismic activity, this bundled approach is a major advantage.

Coverage D protects both the structure and the contents of your home. Coverage V covers only the structure unless you add contents insurance separately.

Contents Insurance (Coverage Y)

Also called renter’s insurance when purchased standalone, Coverage Y protects everything inside your property in cases of forcible entry or theft. This includes furniture, appliances, electronics, linens, kitchenware, and anything else you’ve furnished the property with.

A few specifics to know:

Cash, jewelry, and securities are not automatically covered. If you have high-value items like art, antiques, or collectibles, they need to be itemized, appraised, and added to the policy explicitly.
Average cost: 1% of the insured value per year. If you’re insuring $40,000 in contents, expect to pay around $400 annually.
Detailed inventory required. You’ll need photos, receipts, and a written list of major items. The more documentation you provide upfront, the faster any future claim gets processed.
Application processing timelines vary by insurer. Factor this timeline in when furnishing a new property.

For vacation rental properties, contents insurance is non-negotiable. Guest turnover increases the risk of theft, accidental damage, and wear beyond what a personal residence experiences.

Homeowners Liability (Coverage K)

Coverage K covers civil liability for injuries, deaths, or property damage to third parties that occur on your property or within one kilometer of it. This includes:

Medical expenses for guest injuries
Court costs and legal defense in liability lawsuits
Damages awarded by Costa Rican courts
Incidents caused by pets or animals on the property

Costa Rica is not a litigious country like the U.S., so liability claims are less frequent and damage awards tend to be lower. Still, if you’re renting your property to guests, liability coverage is essential. A guest slipping by the pool, burning themselves on the stove, or tripping on stairs can result in a claim.

Recommended coverage for rental properties: $50,000 minimum. This is sufficient given the legal environment in Costa Rica, and it adds a relatively small cost to your annual premium.

Coverage K does not cover damages caused by war, terrorism, nuclear accidents, malicious acts by the policyholder, or injuries caused by the third party’s own reckless behavior.

HOA Insurance

If your property is part of a condominium development or gated community, your HOA fees likely include insurance for the common areas and the building’s exterior structure. This typically covers:

Shared swimming pools and amenities
Landscaping and common grounds
Building exterior (roof, walls, paint)
Shared infrastructure (roads, gates, security systems)

What HOA insurance does NOT cover: the contents of your individual unit. You’re responsible for insuring everything inside your condo yourself. Many owners assume their HOA fees cover everything, only to discover after a theft or fire that their furniture and personal property were uninsured.

When buying property in a development, ask the HOA for a copy of the master insurance policy. Understand what’s covered communally and what you need to insure individually.

What Standard Policies Don’t Cover

Comprehensive property insurance in Costa Rica is broad, but it’s not all-inclusive. Here’s what’s typically excluded:

Gradual damage. Wear and tear, deterioration, mold from poor maintenance, rust, and corrosion are not covered. Insurance pays for sudden events, not deferred maintenance.
Intentional acts. Damage caused deliberately by the owner, guests, or tenants is excluded.
Acts of war or terrorism. Standard in most insurance contracts worldwide.
Pre-existing damage. If your property had structural issues before the policy went into effect, those won’t be covered.
High-value items without itemization. Art, jewelry, collectibles, and antiques need to be appraised and listed separately.

The key principle: insurance protects you from unpredictable events, not from neglect or predictable risks.

Natural Disaster Coverage: Earthquakes, Volcanoes, and Floods

Costa Rica sits on the Pacific Ring of Fire. Earthquakes happen. Volcanoes are active (Poás, Turrialba, Rincón de la Vieja). Rainy season brings heavy downpours that can cause flooding and landslides, especially in mountainous areas.

The good news: all of this is covered under standard property insurance policies in Costa Rica. Coverage D (Natural Disasters) is not an expensive add-on. It’s part of the baseline package.

This is worth emphasizing because in many countries, earthquake and flood insurance are separate, expensive policies that most homeowners skip. In Costa Rica, you get comprehensive natural disaster protection as standard. It’s one of the best aspects of the local insurance market.

A few practical considerations:

Landslide coverage can be grandfathered. Older policies may include landslide coverage that’s no longer offered on new policies in certain high-risk zones. If you’re buying a property with an existing insurance policy, ask your attorney to transfer it at closing rather than canceling and reapplying. You might lose coverage you can’t get back.
Deductibles apply. Most policies have a deductible of around 1% of the insured value per claim. For a $500,000 property, expect a $5,000 deductible.
Document everything. Take photos and videos of your property before any damage occurs. This makes claims processing faster and more straightforward.

Cost of Property Insurance in Costa Rica

Full coverage homeowners insurance in Costa Rica costs approximately 0.25% of the property’s market value per year.

Here’s a real example (based on a quote from a reputable broker):

Property value: $600,000
Contents coverage: $40,000
Liability coverage: $50,000
Annual premium: ~$1,557 (about $130/month or $4.25/day)

That’s less than what many U.S. homeowners pay for far less comprehensive coverage. And remember, this includes earthquake, flood, and volcanic activity protection that would require separate policies in most other countries.

What Affects Your Premium?

Property value. The higher the insured value, the higher the premium.
Location. Properties in high-risk zones (flood-prone areas, steep slopes prone to landslides) may have slightly higher rates or limited coverage.
Construction type. Concrete and steel construction is cheaper to insure than wood-frame structures.
Security features. Some insurers offer discounts for gated communities, alarm systems, or 24/7 security.
Contents value. The more you’re insuring, the higher the contents insurance premium (typically 1% of insured value).

Colones vs. Dollars

You can pay your premium in either Costa Rican colones or U.S. dollars. Most property owners choose dollars to avoid the impact of currency devaluation. The colón depreciates against the dollar annually, so if you insure in colones, you’ll need to adjust your coverage value regularly to keep pace with inflation.

Paying in dollars locks in the value and eliminates the need for constant policy revisions.

Landlord vs. Homeowner Insurance: Key Differences

If you’re using your property as a vacation rental, standard homeowner insurance isn’t enough. You need landlord or commercial rental property insurance, which differs in a few important ways:

Liability Coverage is Non-Negotiable

A personal residence sees the same occupants day after day. A vacation rental sees new guests every few days. The risk profile is completely different.

Guest injuries are the primary concern. Slips by the pool, burns in the kitchen, falls on stairs, allergic reactions — these happen more frequently in rentals because guests are unfamiliar with the property and often using it for parties, celebrations, or activities that increase risk.

Standard homeowner insurance includes minimal liability coverage. Rental property insurance should include at least $50,000 in liability protection (Coverage K). This is inexpensive to add and can save you from significant legal and medical costs.

Higher Contents Insurance Needs

Vacation rentals are furnished with everything a guest needs: beds, linens, kitchenware, WiFi equipment, outdoor furniture, pool gear, and often extras like kayaks, bikes, or beach equipment. The replacement cost adds up fast.

A typical vacation rental might have $30,000-60,000 in contents. Make sure your Contents Insurance (Coverage Y) reflects the actual replacement value, not just what you originally paid. Inflation and supply chain issues mean replacing a sofa today costs more than it did three years ago.

Increased Theft and Damage Risk

More people in and out of your property means more opportunities for theft, accidental damage, and general wear. Insurance won’t cover normal wear and tear, but it will cover theft and sudden damage events.

Keep a detailed, updated inventory of everything in the property. Take photos. Save receipts. When you add new items (a flat-screen TV, outdoor grill, new appliances), update your insurance policy to reflect the change.

Working with Insurance Agents and Brokers in Costa Rica

You don’t buy property insurance directly from insurers in Costa Rica. You work through a broker who represents multiple companies, handles quotes, files claims, and manages renewals.

A good broker:

Speaks English fluently. Most reputable brokers serving expat and foreign property owners are bilingual.
Works with multiple insurers. They should be able to compare INS, Oceanica, Mapfre, and Lafise to find the best fit for your situation.
Handles claims on your behalf. You should never have to deal directly with the insurance company. The broker files paperwork, follows up, and ensures you get paid.
Provides detailed documentation. A professional broker will visit your property, take photos, note security features, and create a comprehensive file. This speeds up both policy approval and any future claims.

How to Choose a Broker

Ask other property owners in your area for recommendations. Expat Facebook groups, property management companies, and real estate agents can all point you toward trusted brokers.

Look for brokers who:

Have been operating in Costa Rica for 5+ years
Have strong reviews from foreign property owners
Are responsive to emails and WhatsApp messages
Clearly explain coverage, deductibles, and exclusions upfront

One broker frequently recommended in expat communities is Danilo Villalobos of Seguro CR. He works with all major insurers and has a track record of fast, reliable claims processing. (This is not a paid endorsement — just a data point based on online research.)

The Claims Process: What to Expect

Costa Rica’s insurance claims process is more straightforward than in many countries, but it still requires documentation and patience.

Step 1: Report the Incident Immediately

Call your broker as soon as damage, theft, or an injury occurs. Don’t wait days or weeks. Most policies require prompt reporting.

Step 2: Document Everything

Take photos and videos of the damage from multiple angles. If it’s a theft, photograph where the break-in occurred and what’s missing. For natural disasters (earthquake, flood), document the extent of the damage to both structure and contents.

If there’s an injury, get medical records, receipts, and a written statement from the injured party.

Step 3: File a Formal Claim

Your broker will handle this. You’ll need to sign a formal claim application, provide all documentation, and potentially have an adjuster visit the property for an inspection.

Step 4: Wait for Processing

For straightforward claims (theft, fire, storm damage), expect roughly 60 days for processing and payout. Complex claims involving structural damage or disputes over coverage can take longer.

INS has a reputation for being one of the fastest and most reliable payers in the Costa Rican market. Private insurers vary — some are equally fast, others lag.

Step 5: Receive Payment

If approved, payment is issued directly to the policyholder (or to contractors if you’ve authorized direct payment for repairs). Most policies pay out at current replacement value, not depreciated value, which is another advantage of Costa Rica’s insurance market.

Common Reasons Claims Get Denied

Lack of documentation. No photos, no receipts, no appraisal = slower processing or denial.
Pre-existing damage. If the insurer can prove the damage existed before the policy started, they won’t pay.
Excluded events. Gradual damage, intentional acts, or wear and tear aren’t covered.
Policy lapse. If your premium wasn’t paid and the policy lapsed, you’re not covered.

Best Time to Buy Property Insurance

At closing. The day you take ownership of the property is the day you should have insurance in place.

Here’s why:

You know the exact market value. The purchase price is your baseline for insuring the structure.
You can transfer an existing policy. If the seller has an active policy, your attorney can transfer it to you at closing. This preserves any grandfathered coverage (like landslide protection) that might not be available on new policies.
You’re furnishing the property. As you buy furniture, appliances, and equipment, you’ll have a running total of what needs to be insured under Coverage Y.

Don’t wait until after you’ve moved in, renovated, or started renting. The gap between closing and getting insured is when you’re most vulnerable.

Revaluing Your Policy Over Time

Your property’s value changes. You add a pool, renovate the kitchen, build an outdoor deck, or simply benefit from market appreciation. Review and adjust your insurance coverage every 2-3 years to ensure the insured value matches current replacement cost.

If your home was insured at $500,000 in 2020 and it’s now worth $650,000 after renovations, you’re underinsured. In a total loss scenario, the payout won’t cover full replacement.

Work with your broker to get periodic appraisals or market valuations and adjust the policy accordingly.

Property Insurance and Your Property Manager

If you’re working with a property management company like Nest Stays, insurance coordination is part of the service. A good property manager will:

Recommend reputable insurance brokers based on their experience managing dozens of properties.
Ensure adequate coverage for vacation rental use, including liability and contents insurance.
Document the property with photos and inventories that support insurance applications and claims.
Handle claims on your behalf if damage or theft occurs during a guest stay.
Coordinate repairs with your insurance payout to get the property back online quickly.

Insurance is one of those areas where professional property management pays for itself. The right coverage, properly documented and actively managed, protects your revenue stream and your investment.

Frequently Asked Questions

Do I need separate earthquake insurance in Costa Rica?

No. Unlike many countries, Costa Rica’s comprehensive property insurance policies typically include earthquake, volcano, and landslide coverage as part of the natural disaster package (Coverage D). This bundled approach makes full protection more accessible and affordable.

How much does property insurance cost in Costa Rica?

Full coverage property insurance typically costs around 0.25% of your home’s value per year. For a $600,000 property with $40,000 in contents coverage and $50,000 in liability protection, expect to pay approximately $1,500-1,600 annually. Rates are relatively consistent across providers.

Can I get property insurance in Costa Rica if I’m not a resident?

Yes. You do not need to be a Costa Rica resident to purchase property insurance. All major providers offer policies to non-resident property owners, and the application process is straightforward regardless of your residency status.

What’s the difference between homeowner and landlord insurance in Costa Rica?

Standard homeowner insurance covers the structure, contents, and basic liability. Landlord or rental property insurance adds commercial liability coverage (typically $50,000+) to protect against guest injuries and property damage claims. For vacation rentals, liability coverage is essential given the frequency of guest turnover.

Does Costa Rica property insurance cover flooding?

Yes. Standard comprehensive policies include flood coverage as part of Coverage D (Natural Disasters), along with landslides, earthquakes, and volcanic activity. This is particularly important during rainy season (May-November) when heavy rainfall can cause flooding and earth movement.

How long does it take to get a claim paid out in Costa Rica?

With reputable providers like INS, claims are typically processed within approximately 60 days for straightforward cases. The insurance broker handles the paperwork and follows up with the provider. Having detailed documentation (photos, receipts, appraisals) speeds up the process significantly.

Understanding property insurance is just one piece of protecting your investment in Costa Rica. Here are additional guides that cover the legal, financial, and operational aspects of property ownership:

Costa Rica Rental Income Tax Guide — Tax obligations for rental income and how to structure your returns
Holding Companies for Costa Rica Property — Whether an LLC or corporation makes sense for your property
Vacation Rental Regulations in Costa Rica — Permits, licenses, and legal requirements for short-term rentals
Choosing a Property Manager in Costa Rica — What to look for in a management company and how to evaluate services
Property Care in Costa Rica — Maintenance challenges specific to the tropics and how to protect your investment
Property Management Fees in Costa Rica — Fee structures, what’s included, and how to evaluate value
Owner Resources Hub — Everything property owners need to maximize revenue and minimize hassle

Property insurance isn’t glamorous, but it’s foundational. The right coverage, purchased at the right time, managed by the right broker, and coordinated with the right property manager makes the difference between a profitable investment and a costly mistake.