When taking out home insurance in Spain, you can opt for buildings cover, contents cover, or both. Buildings cover insures the structure of your property, and all fixtures. If you buy with a mortgage, your lender will insist on buildings cover.
The building cover will be based on an insurable value for your property, which is not the same as the market value for your property (or what you paid for it). The building and fixtures are insured, not that land your property is built on, which explains the difference. Your insurance policy will be based on what it costs to rebuild your property, not what it would cost to buy it anew. To calculate this ‘rebuild’ value, insurers use standard tables of building costs per square metre. The higher the building specifications of your property, the higher the insurable value.
Contents cover insures all personal belongings that are not part of the structure or fixtures, so basically anything that isn’t nailed down or screwed in, like furniture, computers, artwork, and jewellery.