Insurance for Acts of God?

(article published in Canarian Weekly 8th September 2009)

Oh yes… in Spain we can all be protected from Acts of God through car, house or even business insurance! To find out if you are covered against earthquakes, floods and tornados the answer is that you probably don’t know!

“Act of God” in insurance terminology is an accident caused by the operation of extraordinary natural force. The effect of ordinary natural causes (e.g., that rain will leak through a defective roof) may be foreseen and avoided by the exercise of human care; failure to take the necessary precautions constitutes negligence, and the party injured in the accident may be entitled to damages; an act of God, however, is so extraordinary and devoid of human agency that reasonable care would not avoid the consequences; hence, the injured party has no right to damages. Accidents caused by tornadoes, perils of the sea, extraordinary floods, and severe ice storms are usually considered acts of God, but fires are not so considered unless they are caused by lightning.
Property damage, in many UK insurance policies, exclude from their protection damage caused by acts of God. But in Spain acts of god like tornados, earthquakes, death, extraordinarily high tides, violent winds, and floods are covered in most car, house and business policies!
Your House
All home insurance can cover the following: fire, smoke, explosion, theft, vandalism as well as the insured’s civil responsibilities. Contrary to public belief, many natural disasters, grouped under the term “Act of God”, may be covered if your insurance company is collaborating with the Spanish Insurance Consortium (Consorcio de Compensación de Seguros). The Consortium is a public entity, whose origins lay in the Spanish Civil War and is closely linked to the cover of extraordinary risks or acts of God, it being the core tool of a unique disaster claim compensation system. The Consortium acts in effect as a catastrophe insurer for certain types of insurance and perils in respect of Spanish risks, compensating losses and injuries arising from extraordinary events taking place in Spain and affecting risks located in Spain. It also covers personal damage for extraordinary events taking place abroad if the insured resides habitually in Spain. However, this cover will only apply if you are taking your policy with an Insurance Company that is registered in Spain and cooperates with the Spanish Consortium (e.g. Zurich, Liberty, Axa, Mapfre... etc). Unfortunately some well known English Insurance Companies are operating in Spain without cooperating with the Consortium... this means that in the case of a serious catastrophe (like the Delta Storm in 2001), you won’t be covered... so remember this important detail when you’re calling around for quotes!
Third Party + Windows = Acts of God
Like everything in matters of insurance, it is best to carefully review your contract before something unforeseen occurs. As this is an optional car insurance feature, there are generally distinctions between standard protection packages and optional guarantees, and these vary from one insurer to another. In Spain most Insurance Companies offer a package called “Third Party” (Terceros) which includes the following covers: Public Liability, Legal Defence , Accidents of the driver and Travel Assistance – the break down cover. Then you can add different covers according to your needs and budget. The most common guarantees that can be added are Windows, Theft, Fire, Total Loss and Own Damages with or without excess. A “real fully comprehensive cover” includes all the mentioned guarantees (Public Liability, Legal Defence, Accidents of the driver, Travel Assistance, Windows, Theft, Fire, Total Loss and Own Damages with or without excess)and can still offer you some others like a courtesy car, recovery of points, etc. I wrote a “real fully comprehensive cover” because lately I’ve seen a lot of people who think they have a fully comp and in the end they are missing some of the basic covers or they have all sorts of limitations and excesses. Most important of all, if you are buying your insurance online or by phone, please ask to see the general conditions of the contract before signing. Remember that all consumers have the right of reading the conditions of a contract before signing.
So, going back to the point: most people have no idea that when they are contracting Third Party and an optional damage cover like Windows, Theft or Fire, automatically the car is also covered for Acts of God! This is because part of the premium will revert to the Spanish Consortium, and in case of a natural catastrophe you have the right to claim the damages done to your car.
The same principle applies for your Business or Community. You will be covered through the Consortium if you have an insurance policy that covers any of the following risks: fire, theft; windows; machinery; electrical damages; computers or combined package of covers like Community Insurance, Hotel Insurance, Office Insurance, PYMEs Insurance, etc. The Consortium will also cover loss of benefits if this cover is contracted in the original policy and if the loss of benefit caused was directed by the catastrophe in question.
How to claim it
To claim an indemnization from the Spanish Consortium it’s not complicated, but non Spanish speakers will experience difficulties handling the paper work, so in this case it is best to ask for the help of a professional - your insurance agent. Your insurance agent will handle all the process at no extra cost. Here is another good reason to always contract all types of insurance through a professional insurance agency - most banks, direct phone insurers or even consultancies who are dealing with insurance neither have the knowledge or the patience to handle the claims.
If you prefer to do it yourself you can go online to the Spanish Consortium web page: www.consorseguros.es and download the form “Extraordinary Risks” (Riesgos Extraordinarios) or visit the Santa Cruz Office located in C/ La Marina, 37, 38001 Santa Cruz De Tenerife (902 222 665‎)-

Susana Dias is the Director of TVT - the Zurich Insurance Agency in Los Cristianos legally inscribed at the DGS (Direccion General de Seguros Española) with the number C0530B38657193 - more than 15 years providing excellent service.

Contact the Author for more information or any doubt you might have