The cover provided through the state Consorcio pool, as well as the obligations and problems associated with it, usually raise a number of questions. We are trying to give a global overview, details directly on the web ; English version.

Consorcio de Compensación de Seguros is a public entity attached to the Ministry of Economy, Industry and Competitiveness, through the « Dirección General de Seguros y Fondos de Pensiones”, which is the Spanish supervising entity for Insurance related issues.

Its main functions are :

– Insurer for extraordinary risks

– Provide insurance cover for car insurance under certain circumstances

In the following we’ll concentrate on the first, insurance for extraordinay risks. All insurance contracts concerned are subject to contributions, regardless of whether it is a local policy or an insurance contract providing FOS – coverage.

Coverage is provided automatically exclusively when one of the following guaranteed events has occurred:

– Natural hazards : extraordinary floods (specific definition), tidal waves, earthquake, volcanic eruptions, atypical cyclones, tornados and extraordinary winds (speed over 120km/h) falling meteorites or astral bodies

– Damages caused by violence due to terrorism, rebellion, sedition, riot and turmoil

– Events or actions by the Armed Forces or Security Forces in times of peace

General requirements for compensation are:

– Existence of an insurance contracts covering property damage (and possibly BI), life or accident

– be up to date with payments in accordance with the legislation in force

– having exceeded the waiting period (7 days)

Main exclusions are:

– the fact of not having insurance cover in place for the damaged property, or in the case insurance exists:

– the corresponding policy belongs to a branch to which the Extraordinary Risks system does not extend its coverage (nor is a surcharge charged for it).

– certain branches are not covered by the Consortium. These are:

Transport Insurance

Construction and Erection Insurance

Liability insurance

Health insurance

Legal defence

Travel Assistance

Likewise, for clarification purposes, there is no coverage for the following : direct damage due to risks such as direct rainfall on the insured risk or that collected by its roof or rooftop, non-extraordinary winds, hail, snow, leaks, filtrations, breakage of dams, channels, landslide, armed conflicts, riotous actions in the course of authorized demonstrations or legal strikes, nuclear energy, lack of maintenance, …events that, due to their magnitude and seriousness, are qualified by the Spanish Government as a national catastrophe or calamity.

Deductibles may partly differ from the contractual ones:

Direct damage to property (other than automobile or homeowner’s policies): 7% of the indemnifiable amount.

Business Interruption: as established in the insurance policy for this coverage.

Claims are to be declared directly to the Consorcio de Compensación de seguros by phone or website.

As an exception, we should mention damage due to extraordinary winds. In order to determine the wind speed, a report has to be requested from the meteorological authorities, but in order to speed up the procedure, Consorcio and the insurance companies have agreed that it is the insurance company which will first compensate the insured, and once the wind speed has been determined, if it has exceeded 120 km/h, the insurance companies will request the return of the compensation they had advanced.

Payment of surcharges: surcharges are shown on the insurance premium invoice and collected by the insurer. The premium rates to be applied to the capital insured in ordinary policies for the calculation of the annual surcharge are as follows (special cases may apply):

– Housing and homeowners associations (comunidades) – 0,07 per mil

– Offices – 0,12 per mil

– Remaining risks (commerce, industry, others) – 0,18 per mil

– Vehicles – from 1,20 EUR and 26,60 EUR

– Highways, railways, etc. – 1,25 per mil

– …

For risks with sums insured of more than EUR 600,000,000 or first loss insurance and some other cases there are specific rules

Automatic coverage:

When in the ordinary policy an automatic margin of cover is established, at the end of the period the surcharges in favor of the Insurance Compensation Consortium must be regularized for the margin actually consumed and according to the effective time during which the capital sums have exceeded those initially insured. Notwithstanding the above, it will be admissible to proceed to the definitive pricing of the risk from the beginning, by means of the application of the rates established in the previous sections on a volume of capital equal to that initially insured plus 30 per cent of the margin established in the policy, provided that this margin does not exceed 20 per cent of the capital initially insured.

In case premium adjustment is not made or not made on time following the contractual clauses, Consorcio will not cover the exceeding part.

Premium payment: premium payment must be up to date with in accordance with the legislation in force, which generally means that premium must be paid within 30 days after renewal date (regardless when the renewal documents have been send). For new risks, premium must be paid before inception date. Losses are not covered when the date of issuance of the policy or of effect, if later, was not at least 7 days before the occurrence of the damage.

This summary has been prepared for information purposes only and is in no way legally binding. For binding information please contact directly Consorcio de Compensación de Seguros.

Source: IberAssekuranz; Consorcio de compensación de seguros in spain (March 2022)