Your mortgage balance is not your rebuild cost
Short answer: Panama’s insurers’ association (APADEA) says owners with a mortgage should check that the insured sum matches the real cost to rebuild, not only what is left of the loan, and describes a deductible of 2% of the insured sum as common for earthquake cover. The name of a policy does not by itself guarantee earthquake cover.
Most buyers insure a property because the bank requires it, then never read the policy again. This note collects what the insurers’ association and the regulator have published in October 2026 and turns it into five questions to ask the broker. It is general information, not insurance or legal advice.
Step 1: which policy covers what
According to La Prensa, citing APADEA, two types of policy can cover earthquake damage: a fire policy, which protects the structure when the contract includes earthquake risk, and a residential multi-risk policy, which can protect the contents. The article stresses that the policy’s name alone does not guarantee that every earthquake loss is covered: check the contract’s exclusions, limits and conditions.
Infobae reports regulator figures to August 2026: 373,738 fire-and-allied policies in force (336,098 residential) and 35,455 multi-risk policies (28,036 residential). It notes these totals do not say how many include earthquake cover.
Step 2: the five checks
The table keeps what the sources say apart from what only your own contract can tell you.
| Question | What APADEA and the regulator say | What to check in your own policy |
|---|---|---|
| Structure (walls, ceilings) | A fire policy can cover it when the contract includes earthquake risk | That earthquake is written into the contract, plus exclusions and limits |
| Contents (furniture, appliances) | A residential multi-risk policy can cover them if they are listed and earthquake is included | Whether your contents are insured at all, and for how much |
| Insured sum with a mortgage | Should match the real cost to rebuild, not only the outstanding loan balance | Who calculated the sum and when it was last updated |
| Earthquake deductible | A deductible of 2% of the insured sum is described as common, applied to the sum, not to the damage | Your actual percentage; small repairs below it are yours to pay |
| Reporting a loss | Report visible damage early, even if you think it is below the deductible | The insurer’s phone and WhatsApp channels and your broker’s number |
Step 3: the insured sum, when you have a mortgage
APADEA warns that the amount still owed on a mortgage can be far lower than what it would cost to rebuild, which can leave an owner under-insured. The association recommends reviewing and updating insured sums. For a buyer, that means asking who set the sum, on what basis, and whether it is indexed or reviewed.
We found no published figure for rebuild cost per square metre in Panama that we trust enough to quote, so we do not give one. A construction professional or the insurer’s own valuation is the right source for your unit.
Step 4: the deductible is on the sum, not on the damage
La Prensa reports that deductibles of 2% of the insured sum are common in Panama and abroad for fire policies with catastrophe cover, and that this is calculated on the insured sum, not on the loss. Illustration, Brax calculation: on a $300,000 insured sum, 2% is $6,000, so a repair that costs less than that would be yours to pay. Your policy may differ.
APADEA’s advice is to report any visible damage to the insurer or broker even if you think the repair costs less than the deductible, and to keep photos, videos and invoices taken before cleaning up, when it is safe to do so.
Step 5: where this matters for a buyer
For a unit in a condominium, ask whether the building has a common-area policy and what it covers, because your own policy and the building’s do not do the same job. For a new build, ask the developer who insures the structure until handover. Related: buying property after the earthquake and who pays what at closing. Also watch for fraud: APADEA warns against paying anyone who promises to speed up a claim and asks you to verify the identity of adjusters and intermediaries.
Related: Buying property in Panama after the earthquake, Who pays what at a closing.
Questions about a specific unit? Jacky, from the Brax team, answers on WhatsApp: +507 6776-4203. Brax is paid a commission by developers on new-build units.
Common questions
Does home insurance in Panama cover earthquakes?
It can. APADEA says a fire policy can cover the structure and a multi-risk policy the contents, but only if the contract includes earthquake cover. Check the exclusions, limits and deductible.
Should the insured sum equal my mortgage balance?
APADEA advises against that: the insured sum should match the real cost to rebuild, which can be well above what you still owe.
What is a typical earthquake deductible in Panama?
La Prensa reports that 2% of the insured sum is common. It is calculated on the insured sum, not on the damage, so small repairs may fall below it.
What should I do after damage to my property?
APADEA advises reporting it to your insurer or broker early, documenting it with photos and videos before cleaning up when safe, keeping invoices, and asking a qualified professional to assess it.
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