The DANA that hit the Spanish Levante demonstrated the vulnerability of certain areas to extreme weather events. The magnitude of the damage tested the insurance industry and, in particular, a unique institution in the world: the Insurance Compensation Consortium (CCS).
Although its role in the sector has generated significant media interest since last October, the CCS has been complementing private insurance in Spain for decades. It was established in 1941 under the name, “Mutiny Risk Compensation Consortium”, as a provisional instrument to facilitate the settlement of damages caused by the Spanish Civil War, and it acquired its definitive name in 1954, when it began covering extraordinary and agricultural risks. In this second stage, it gradually took on new functions in export credit insurance and agricultural insurance, and absorbed two autonomous government bodies: the Mandatory Automobile Insurance Guarantee Fund and the Commission for Mandatory Travel Insurance. In its third phase, which continues to the present day, it became a state-owned company and established a path of collaboration with private insurance.
Objective and scope
Attached as a public entity to the Ministry of Economy, Commerce, and Business (MINECO), its main objective is to guarantee coverage for damages arising from natural disasters and extraordinary claims (such as acts of terrorism or nuclear accidents). Its support for private coverage is essential in these exceptional cases, both at the contractual level and in assisting those affected.
Its actions in climate catastrophe situations are activated under specific conditions, as the damage caused must meet certain requirements for compensation.
The first requirement is that the incident must arise from natural disasters. As Alejandro Izuzquiza, former Operations Manager of the CCS, explained to us in an interview given to this platform, “there are events in which the Consortium does not act, such as cases of damage caused by snow or hail, phenomena that are not listed as extraordinary risks.” There are other events in which both the CCS and private insurance intervene: in the case of intense rain that causes flooding, the Consortium compensates for damages caused by land flooding due to rain or the overflow of a river, as flooding is listed as an extraordinary risk. Meanwhile, the private insurer compensates for damages caused by rain seeping through windows or roofs, as rain alone, regardless of its intensity, does not constitute an extraordinary risk.
The DANA in Valencia: an example of a response
On October 29, an extraordinary episode of intense rainfall hit the Spanish Levante, leaving behind an unprecedented scenario of human, material, and economic damage. The situation, as reflected by the Ministry for the Ecological Transition and the Demographic Challenge (MITECO) in its subsequent report, was the result of the presence of a DANA located above the Strait of Gibraltar which favored the torrential rains that affected the provinces of Cuenca, Murcia, Albacete, and Valencia, with the latter two regions being particularly impacted. Record figures were reached, such as the rainfall recorded in the Valencian city of Utiel, where 771 l/m² were measured in 24 hours, with 185 l/m² accumulating in just one hour.
Following what happened, the CCS immediately activated the intervention protocol, analyzing the affected areas and assessing the extent of the damage. It also quickly contacted intermediaries and insurance companies, with whom it continues to collaborate today to provide assistance to those affected. The institution has estimated total damages at 3.5 billion euros.
According to the fifth information note published by the Consortium, which details the actions carried out until November 21, 2024, more than 200,000 compensation requests have been filed, broken down by the following risk types:
- Homeowners: 64,097 compensation requests.
- Vehicles: 120,394 compensation requests.
- Shops, warehouses, and other risks: 11,757 compensation requests.
- Offices: 908 compensation requests.
- Industrial risks: 3,474 compensation requests.
- Civil Works: 42 compensation requests.
To attend to them, the CCS has mobilized more than 1,000 appraisers, in addition to appraisers from other insurance companies, to whom at least 145,781 cases have been assigned. This collaboration was made possible thanks to an express agreement between MINECO and Unespa for the collaboration of the private insurance industry in the management and appraisal of damages, with the aim of shortening the time frames in which the CCS compensates the insured.
Claim requirements and process
To be eligible for CCS compensation, it is essential to have an active insurance policy that includes the necessary coverage, and to be up to date with premium payments. Coverage is provided for damages caused to people and property, as well as accommodation costs for uninhabitable dwellings or loss of income due to the stoppage of economic activities. Loss of income is only covered if specified in the policy and if the damage affects the insured property.
To request compensation, the insured parties must follow the established procedure, with the usual assistance of their insurance companies: notification of the claim, inspection of damages, and submission of the relevant documentation, which can be done by phone or online. Although insurance legislation stipulates that the maximum deadline for submitting these requests is 7 days, this extreme situation has led the Consortium to announce that all requests received will be processed, even if they are submitted beyond the one-week period.
