Floods and flash floods: what does insurance cover if my car is affected?

Car insurance policies do not cover damage caused by natural phenomena, such as floods. If you are affected, you will have to claim possible compensation from the Consorcio de Compensación de Seguros (Spanish Insurance Compensation Consortium).

Many drivers don’t know this and believe that by taking out a comprehensive policy for their car they are covered against any eventuality. Nothing could be further from the truth. Except for specific policies – anything can be insured, it will depend on what you are willing to pay – car insurance does not cover damage caused by natural phenomena, nor damage caused by acts of terrorism, nor those arising from possible actions by the Armed Forces or the State Security Forces.

So what should we do if we are affected by any of these cases, such as a flood? We turn to the Consorcio de Compensación de Seguros.

What is the Consorcio de Compensación de Seguros and what does it cover?

The Consorcio de Compensación de Seguros is a public body that depends on the Ministry of Economy. Its operation is somewhat like that of an insurer, admitting direct insurance contracts. But it can also act as a guarantee fund, taking charge of the compensation established when damage occurs under certain circumstances. You can check here how the Consorcio de Compensación de Seguros works in the event of claims.

So what can the Consorcio cover? Everything we have mentioned that car insurers do not cover, such as damage from natural catastrophes, or that caused by terrorist or vandalistic acts. And among these cases are cars affected by floods or flash floods.

Of course, some aspects must be taken into account here. For example, you can only claim from the Consorcio de Compensación de Seguros if the water causing the damage comes “from below”, that is, from the street or the sewer network, a typical situation in a flash flood that sweeps everything away and floods houses and garages. When a car is damaged by water that has entered a home or garage through roofs, terraces or covers, the claim must be made to the home’s multi-risk insurance.

It is very important to bear in mind that for the Consorcio to compensate you for damage to your car caused by natural catastrophes, such as a flash flood, you must have a policy that covers own-damage to the vehicle, even if it has an excess. If you only have compulsory third-party liability insurance (the well-known “third-party” insurance), you will only be entitled to some kind of compensation if your car has been affected in an area that the Government may declare a catastrophe zone.

How much would the Consorcio pay me and what am I entitled to?

Normally, the Consorcio will compensate according to what you have agreed in your car insurance policy. Logically, that is why it does not cover damage to the car if you have not taken out insurance that covers own-damage. And it will do so under the same conditions.

If the vehicle affected by a flash flood is declared a total loss due to the high cost of repair, the amount to receive as compensation would be the market value of the car. For this, the assessment of the damage must be carried out by an expert appointed by the Consorcio. The problem here is that “market value” can have two meanings, depending on what you have in your policy… or on who applies it.

On the one hand, the market value may be the value when new. On the other, it may be the “market value” or replacement value, which is what a car you bought at that moment with the same age and characteristics would cost. The differences are very large, check what you have in your policy, since they will usually try to offer you the lowest.

How should compensation be requested?

The first thing is to file the relevant report with your insurance company. Once this is done, you will have to submit a claim declaration at the corresponding office of the Consorcio de Compensación de Seguros. They will ask for a lot of documentation: a copy of the policy, the latest insurance receipt and the vehicle registration document. The recommendation, if you want to avoid problems, is to start the compensation application process with the Consorcio within seven days of the incident.

From here, once payment of the compensation has been accepted, you have the option of negotiating with your insurance company so that it claims the amount directly from the Consorcio. If the car needs repairs, it is even possible to request an advance for the repair while the Consorcio makes its ruling, to save time and be able to enjoy your vehicle as soon as possible.