What happens when you try to make a claim on your insurance policy after a freak storm has damaged your property and you discover that the ‘extraordinary occurrence’ is specifically excluded from your policy? Or when you attempt to make a claim you find that your insurance company is unable to meet its commitments and has initiated insolvency proceedings? Do you have any recourse? Who, in effect, insures the insurers? Fear not, as this is where the Consorcio de Compensación de Seguros comes into effect.

The Consorcio de Compensación de Seguros, known in short as the Consorcio, is a public entity whose origins date back to the Spanish Civil War. The Consorcio was set up to indemnify Spanish insurance companies in the event of claims arising due to extraordinary and unpredictable occurrences, such as natural catastrophes. Cover by the Consorcio is not automatic; it is subject to certain conditions, the main ones being it will only assume the risk if the Insurer specifically does not cover it or if the Insurer, due to insolvency, can not meet the claim.

Generally speaking, domestic insurance companies in Spain do not cover extraordinary risks; they will categorically state in the policy documentation that such losses are not their responsibility, but that of the Consorcio. Because of this a proportion of the annual cost of your insurance is typically paid directly to the Consorcio.

Since its inception the role of the Consorcio has evolved considerably, most notably as a result of the terrorist attacks in September 2001, and the subsequent impact on the insurance market. The Consorcio responded by extending its remit to cover and compensate for losses and injuries to Spanish residents for personal damage arising from extraordinary events, such as acts of terrorism, occurring both within and outside of Spain.

Its other insurance related responsibilities now encompass multi-peril crop and forest fire insurance, compulsory motor liability insurance, compulsory hunter insurance and compulsory travel insurance. Being a member of the Spanish Pool for Environmental Risks, means the Consorcio is also active in environmental risk assessment and liability.

In addition to insurance related aspects, the Consorcio assumes other risks within its mandate. i.e. subsidiary and guarantee funding activities relating to export credit insurance, the winding up of Spanish insurance companies and acting as receiver in insolvency proceedings.

As with all official bodies, making a claim can be somewhat complex and it helps considerably to have all the relevant documentation when you submit your claim, and that you keep copies of everything you send. A claim will only be settled if it is made on a loss declaration form and if all accompanying documents are in order. Depending on the nature of the claim different documents are required. A brief summary of what may be requested is shown below.

Photocopy of Identity/Fiscal card of the injured person and of the beneficiary to whom compensation is to be paid, if different.

Bank account details of the beneficiary.

Photocopy of the Particular and General Terms and Conditions of the Policy and of all appendices or supplements.

Photocopy of the current insurance payment receipt, showing the amounts corresponding to the commercial premium and to surcharge paid to the Consorcio de Compensación de Seguros.

Supporting documentation on the cause leading to the loss and of injuries suffered (if applicable).

Death Certificate, Will or, in the absence of a Will, an Inheritance Declaration when no beneficiary is declared in the policy.

This list is by no means exhaustive; much will depend on the nature of the claim. For more details relating to required documentation, look on the official website of the Consorcio. This is particularly helpful to non Spanish speakers as the information is given in multiple languages whereas if you call the helpline it is unlikely you will be able to speak to someone in English.

Aside from its crucial role as a ‘catastrophe insurer’, the Consorcio has a duty to attempt to prevent and reduce losses both to itself and the insurance industry as a whole. It does this through the implementation of a programme of environmental disaster prevention measures, strategically developed through the study and research of both atmospheric and geologic natural events.

This diverse range of responsibilities leads to the Consorcio being regarded as a vital tool, not only in the disaster claim compensation system, but also in the Spanish insurance industry as a whole.