The Importance of Earthquake and Flood Insurance in Spain
Whether you’re living in Spain, own property there or just read the news, you’re sure to have heard about the terrible flooding that happened in Valencia in October 2024. Lives and livelihoods were lost, cars were stacked on top of each other and an entire country came together to help the relief work.
Thousands of people found their homes and priceless possessions buried under a thick layer of mud or washed away by the forceful waters. Many people lost everything.
The flooding was caused by heavy rainfall in the hills around the city – more than a year’s rainfall fell in only a few hours, meaning many rivers broke their banks and flooded surrounding towns and villages. It was a freak natural disaster that affected thousands.
Of course, most of those affected won’t be able to get their beloved possessions back but the big question on many people’s minds was: will insurance cover it? Do you need to take out a certain policy? And what help does Spain offer to those affected? Here’s everything you need to know about protecting your home.
Severe Weather in Spain
Most of us think of Spain as being warm and sunny. Which it is, for more than 300 days of the year. But the Mediterranean and mountainous regions can cause severe weather, deeply affecting nearby people.
In recent years there have been several flash floods along the Costa Blanca and Costa de Sol, including floods in Malaga in 2016 and the Easter floods of 2019 that affected large areas of eastern Spain. Flash flooding in Spain is fairly common and often clears up within a few days, unlike the Valencia floods in October.
Hailstones are also pretty common in Spain and are often very large and can even fall in August! In more mountainous areas, it’s not uncommon for snow to fall in winter too – remember storm Filomena in 2021 that led to people skiing in the streets of Madrid?
In summer, and with the ever-rising temperatures, fire can also be a major concern, especially for those living close to dense forests. Lack of rainfall and knowledge about how wildfires are started can be devastating.
Do You Need Earthquake and Flood Insurance in Spain?
There are lots of things that expats buying in Spain need to know about property insurance. Of course, the main one is to have valid property insurance that protects you. However, in Spain, it’s almost always mandatory to extend coverage to include Extraordinary Risk Insurance.
In fact, most homeowners take this out automatically when they take out their standard cover. This is a mandatory cover for several different types of insurance policies including industry, civil works, commercial, residential, motor, personal injury and business interruption.
The Consorcio de Compensación de Seguros (Insurance Compensation Consortium) is then responsible for providing cover in the case of natural disasters. The Extraordinary Risk Scheme is an agreement between the public and private sectors and is a government-backed scheme financed through mandatory surcharges on insurance policies. It covers natural disasters such as:
Flooding (riverine, pluvial and coastal)
Wave battering
Windstorms (winds faster than 120km/h) and tornados
Earthquakes
Tsunamis
Volcanic eruptions
Meteorite falling
Natural disasters covered by the private market include precipitation, landslides, snow avalanches, ground subsidence or damage caused by winds with speeds below 120km/p.
Whilst large-scale natural disasters are covered by the CCS, they don’t cover everything and you may wish to take out extra insurance to cover the gaps. Some optional or additional covers you can take out are for:
Hailstorm
Lightning (direct hit and surge)
Frost
Collapsing sinkhole
How Do You Make a Claim Caused by an Extraordinary Risk?
If your property or business is damaged by an earthquake or flooding (or any other natural disaster listed by the CCS), it’s important to document the damage as quickly and as safely as possible. Photos are a must.
You can then contact the CCS directly or through your broker or insurance company. In other words, the CCS is a direct insurer. Cover through the CCS for natural disasters is automatic and there’s no need for a declaration from the authorities. There’s also no upper or lower limit.
So, Do You Need Earthquake and Flooding Insurance in Spain?
Weather in Spain is unpredictable and it’s only going to get more so as climate change has a bigger impact. It’s therefore imperative to have Extraordinary Risk Insurance. In fact, this type of insurance is mandatory for properties in Spain.
The CCS is in charge of processing all claims relating to extraordinary natural disasters and has paid out billions of euros in the last couple of decades to those who have been affected by natural disasters (with flooding accounting for around 70%).
Insurance payments are an important part of property banking. Opening a Bueno bank account is a quick and easy way to manage your property finances effectively, and seamlessly transfer funds between currencies and other accounts. Get in touch with the team at Bueno to see how our convenient and 100% online Spanish home insurance can give you peace of mind, knowing your beloved Spanish property is covered in the case of a natural disaster.
Note that this article is general and is shared as information. Property, tax, finance and other legal topics are personal and can vary not only from person to person but between the different regions of Spain. We recommend that you seek professional guidance if you need advice on matters covered in this article.