The massive floods that have been punishing the Mediterranean area since last week are going to become the most costly natural catastrophe in the history of Spain, with a cost that in the field of insurance compensation will far exceed 1,000 million euros. Those victims who had insurance in force will see how a good part of the damages suffered are covered by the Insurance Compensation Consortium (CCS), which depends on the Ministry of Economy although it is supported by a small surcharge that is applied to each of the premiums. issued by insurers. Its main purpose is to cover catastrophic damages – also those caused by terrorist acts – which are difficult for a private entity to insure because it is difficult to estimate the risk of their occurrence and the amount of the amount.
Those affected who had a policy in force, at least one week before the onset of the damage, may claim the CCS to take care of the compensation. In fact, the organization has already received 46,000 requests, of which it has begun to process 40%. To assess the damage, it has hired an army of more than 400 experts, who are already contacting those affected.
Below is a short guide to understand how this consortium works and how claims should be processed:
What assets are covered?
The key, in all cases, is to know what was included in the contracted policy. That is, the consortium only covers what the user had contracted, not additional losses. This implies that users with better insurance contracts will be better covered by the consortium than those who sign the minimum policies, and that those who do not have insurance will not be paid. All in all, the level of insurance in the affected area is relatively high: depending on the sector, 76% of the insurable assets in the Valencian Community are covered by some type of policy.
- Automobile. With a mandatory policy, even in third-party insurance, the Consortium will be responsible for repairing damaged cars or paying compensation when it is considered that it is not worth taking them to the workshop. The money that the insured will receive is calculated according to the market value of the vehicle, which is an estimate of its market value, so the model and age are influenced. Thousands of cars, vans and trucks have been affected by the storm, but practically all of their owners will receive compensation since car insurance is mandatory.
- Home. In home insurance, policies usually cover damage to the home (walls, doors, windows, ceilings, floors, structure…) and its contents (furniture, appliances and belongings inside). Around 74% of the homes in the community have a contract of this type, but the coverage is almost always partial and limited. If the home insurance (often linked to the mortgage) covers a maximum amount of 50,000, or 100,000 euros, the insurance consortium will pay up to that amount, regardless of the cost of the damage. And if the affected person did not have home insurance, they will not collect. Some contracts may even cover the uninhabitability of the home by its owners, with which the Consortium would take care of bills for hotels and alternative accommodations. And the owners of properties that were used for rent could also receive compensation for loss of income, as long as it was stipulated in the conditions of the contract.
- Neighborhood communities. The housing blocks also have insurance and, in fact, in the case of the Valencian Community, these policies are mandatory to cover possible damages to third parties (facade detachment, floods, etc.). Thus, damage coverage will depend on the clauses of the contracts of each community of owners.
- Companies. Those businesses and companies that had a contracted policy will also receive compensation from the Consortium. Normally, the cost of repairing the premises and loss of merchandise is included, but in some cases they also include compensation for the cessation of activity. This same criterion applies to industrial or agricultural insurance, which covers the loss of operations.
- personal injury. In cases where a deceased person had life insurance or an injured person had accident insurance, the CCS would be the entity in charge of paying the heirs or the injured party. Likewise, in this case the amount of compensation depends on the contract signed and the coverage contracted: an executive whose senior management contract includes extensive life insurance will not earn the same as someone covered by the policy associated with the credit card. And, if the victim was or is uninsured, there will be no compensation in this way.
When do I have to claim?
The Consortium has insisted that there is no rush to process compensation requests. Unlike other types of accidents, when the client is asked to start the procedure within a week, here we do not want to put pressure on those affected, since the priority is to recover the bodies, repair infrastructure and thus recover normality.
It is important that, to the extent possible, we try to document the damage, taking photos that can later be sent to the experts.
Where do I have to do the procedure?
Normally, the reports in these floods must be presented on the web www.consorseguros.es or by calling 900 222 665. But on this occasion, insurance companies and mediators have already offered to help clients process these reports. The user will have to contact their company, which in turn will send the procedure to the CCS.
Mapfre, for example, has enabled telephone numbers 900101012 and 918366279 to directly assist those affected by the damage. You can also use their website or the company’s mobile application. In addition, all its offices in the area near the disaster (Valencia, Torrent, Picanya, Paiporta, Utiel) will serve clients continuously from 10 a.m. to 5 p.m.
Occident has opened the line 900 110 200 to provide service to the affected people. Its policyholders also have personalized advice from their mediator, who will help with all procedures related to the impact caused by the catastrophe. It has also reinforced the network of experts who assess and evaluate the damage caused by the storm in the affected areas.
How much will they pay me?
The Insurance Compensation Consortium (CCS) and the insurers of the homes, premises and the community of owners will compensate the damages caused, but the amounts paid may not exceed in any case the value of the destroyed property or the limit stipulated in the contract. .
The “insured capital” is the maximum amount that the Consortium or the insurer will pay for the damage that has occurred to an asset. In this case, we must consider the insured capital of the community of owners policy, on the one hand, and that which appears in each of the home or commercial insurance of the owners of the community.
The owner of a large home, who has expensive insurance with extensive coverage, will end up charging more than a person who owns a smaller home.
The Consortium also pays money for the cleaning hours that the affected person may have dedicated to removing mud and belongings from their home.
Is it necessary to declare a catastrophic area?
It is not necessary for the catastrophic area to be declared, nor do we have to wait for said declaration to begin the procedures. Insurers and the CCS are committed to caring for any person or property that is insured and has been affected. Whether it is a car, a house, a commercial premises, etc. This attention is automatic and completely independent of the fact that, in the face of general damage, the Administration decides to declare a territory as a catastrophic area and grant some type of public aid or subsidy.
Therefore, policyholders will be able to process their claims to the CCS or to their insurer (which will act on their behalf) independently of the actions that the Administration will take on the territory.
What else are insurers doing?
In addition to offering to help its clients manage the procedures before the Consortium, the insurance sector is launching numerous initiatives to support those affected. Generali has launched a fundraising campaign together with the Red Cross to bring urgent aid to those affected by DANA. The company will match each euro donated up to 250,000 euros.
Mutua Madrileña has activated its investment vehicle Mutuafondo Compromiso Solidario to channel money that its clients have in funds and want to donate to Cáritas for the acquisition of goods to meet the basic needs of the affected population, such as clothing, blankets, medicines, food, water and basic supplies. You can also make contributions directly by calling 900 555 559.
Zurich Seguros has made a free psychological assistance service available to all its clients and family members affected by dana to support them emotionally in the face of the dramatic events. This telephone line, available 24 hours a day, seven days a week, has a team of specialized psychologists prepared to provide assistance and social support at any time. In addition, through the Z Zurich Foundation, it is committed to matching each donation received, up to a total of 100,000 euros.
On the other hand, the Administrative Managers associations announced this Monday that they will return the amounts charged to temporarily deregister vehicles in their agency network, as long as the procedure is carried out through one of their technological platforms.
