It is not only policies taken out in Spain where you are only covered for 1 flight. Another thing to look for if you are intending to use 2 or more flights is what is the minimum time allowance between flights. In other words all companies that I have looked at, they will state that the minimum time between flights is usually 3 hours or 2 hours between landing and closing of check-in.
There are several companies that offer travel insurance to European residents where the policy is in English and/or are based in the U.K. Amongst them not already mentioned are Globelink (U.K. based), Dragon Insurance in Alicante, Ibex (Gibraltar based but underwritten by Lloyds) and many more. All have different underwiting criteria and also change from year to year. In other words a company that insured your ingrowing toenail last year will not accept it this year whereas a company that last year said no will say yes this year.
It is also very important to notify the insurer if anything changes in your medical conditions after taking out a policy and you travelling. I.e. if after taking out your policy you are diagnosed with diabetes you must inform the insurer because failure to do so might invalidate your policy.
Therefore whilst it is vital to have travel insurance you must obey all their terms and conditions or else they will not pay out your claim if you are unlucky enough to have one.