Insured losses from the extreme flooding in the eastern and southern regions of Spain are expected to be well above EUR 1 billion, given the significant damage to people, properties, vehicles, and businesses as well as to the region's agriculture sector, global rating and consultancy company Morningstar DBRS said.

On 29 October 2024, extreme flooding triggered by severe torrential rainfall affected the eastern and southern regions of Spain, ultimately leading to one of the deadliest weather events experienced in Spain. The heavy rains were mostly concentrated in the vicinity of Valencia, Albacete, Cuenca, and the eastern part of the Andalusia region, resulting in floods, numerous deaths and widespread damage to property and infrastructure. In some areas, the equivalent of one year's worth of rain fell in just eight hours. “While it is still very early to provide a loss estimate, we expect that the economic losses of the weather event will reach several billion euros,” Morningstar DBRS said.

The state-owned Consorcio de Compensación de Seguros (CCS), the manager o the Spanish extraordinary risk insurance scheme, operating under the Ministry of Economy, Trade, and Business, provides coverage for damages caused by extraordinary flooding, which is classified as an "extraordinary risk." The CCS will directly assess and manage compensation claims for eligible damages resulting from the flood. Coverage applies if the affected individual or property was insured with an active policy at the time of the flood.

CCS compensation includes both personal damages to insured individuals and damages to insured property, covering residential, commercial, industrial, and public properties. Compensation is provided according to the insured amounts and terms specified in the policy. Additionally, CCS covers both material damages and indirect losses, such as lost rental income, housing expenses for uninhabitable homes, or business interruption losses, all in accordance with the affected party’s insurance contract.

On the agricultural side, all risks associated with this extreme weather event are included in the coverage of the Spanish Combined Agricultural Insurance system (Agroseguro). Claims will begin to be received once insured farmers and ranchers can access their farms and verify the damage caused by the storms. The institution has set dedicated lines of communication and will proceed to the damage assessment work in the affected areas once the water has receded.

In any case, and given the extraordinary dimensions of the event and the expected huge number of claims expected, both CCS and Agroseguro have announced that will register and process all compensation claims they receive from policyholders, even if after the deadline required by insurance law for reporting the losses.