The Mediterranean coast has historically been a place of torrential and highly concentrated rain. Cold drops are well known to the Valencian population, which on more than one occasion has flooded entire towns, as already happened in the 1957 flood.
Proof of this are the more than 800 million euros that the Insurance Compensation Consortium (CCS) has disbursed since 1996 in compensation for the destruction caused by the floods, this area being one of the most affected and, therefore, the one that has received the most compensation.
However, the DANA that has mainly devastated the towns surrounding the city of Valencia, in the absence of knowing the first confirmed figures, aims to be the largest and most expensive incident in the history of the Consortium in its more than 80 years of existence. The Government estimated the compensation damages at 3.5 billion, well above other catastrophes such as the Bilbao floods in 1983 or the Lorca earthquake. The first did not reach 1,000 million, and the second exceeded 600 million, which gives context to the seriousness of the situation.
And compared to what is included in the Júcar Hydrographic Demarcation, an area that brings together the areas that have been affected by this last cold drop, this event will mean a cost between four and five times more than what the Consortium has allocated in the same area since 1996.
A punished area
The analyzed area includes about 800 municipalities. Of them, up to 533 have been affected and have received compensation from the Consortium for floods, which would be more than two-thirds of the total.
The city of Alicante takes the cake in terms of costs for the Insurance Consortium. In the last 28 years it has received almost 62 million in compensation, just over 6% of the total funds allocated to repairs. Valencia is the second city with the highest cost, with 57.1 million euros, followed by Paterna, with 37.8 million.
Obviously, greater compensation has a lot to do with the population of the municipality, because more people are almost always linked to more insured people and more insured capital. Hence, large cities are always at the top of these types of rankings. At a national level, it is also what justifies that Madrid, Barcelona and Valencia are the three provinces with the most insured capital, because they are also the three most populated.
In addition, there may also be variations depending on the insured population. According to data from Unespa, the insurers’ association, the region of Valencia is one of the most insured, with 76%, above the national average. Regarding homes, the organization chaired by Mirenchu del Valle indicated that up to 77% of homes had insurance, while in the rest of Spain it is reduced to 74%.
But obviously, what most influences whether there is more or less compensation is the frequency of accidents. And in the last six years there have been 29 relevant flooding episodes in the area included in the Júcar Hydrographic Demarcation. In total, the Insurance Compensation Consortium intervened in 5,533 daily events in the Júcar basin at that time.
The most expensive between 2018 and 2023 was in the municipality of Beniparrell (Valencia), which involved a total compensation of 14 million euros. This flood on May 11, 2020 also affected Almussafes and Benifaió, with 9.3 and 8.1 million compensation respectively.
The majority of affected populations, however, belong to Valencia. And this province alone accounts for more than 50% of the Insurance Consortium’s spending on compensating the DANA area. Since 1996, they have been 436.9 million euros, more than double that of Alicante (177.5 million) and Castellón (150.1 million). The rest of the region, with areas in Cuenca, Teruel and Albacete, barely account for 5% of the Consortium’s funds to compensate for property damaged by floods.
It rains in the wet
For many of the towns and cities affected by DANA, this will be like starting from scratch again. But for 29 of the 78 that are on the official list For those caught by the storm, they press this “reset” button more often. From Valencia capital, due to the damage in some neighborhoods such as La Torre, to Caudete (Albacete), all of them already fell within the history of the Insurance Compensation Consortium as those most affected by floods.
Some of the municipalities that are being shown more in the media because the devastation has been greater had already suffered the flow of water not so long ago. Ribarroja del Turia, Almussafes, Algemesí, Chiva, Alfafar, Aldaia or Alcudia among others are on that list that no one wants to be on for greater compensation from the Consortium in the Júcar demarcation. In total, only with these thirty locations there is already an expense recorded by the public entity of 382 million euros between 1996 and 2023most of these belonging to Valencia.
A single public insurance entity
The Insurance Compensation Consortium is a unique figure in the world. No country has a similar organization that intervenes when extraordinary risks occur such as floods, earthquakes or volcanic eruptions, among others. Normally it is private insurers, with reinsurance, that have to provide the funds intended to compensate those harmed by these atmospheric phenomena. Here, the CCS protects any citizen with a policy in force and up to date with payments when the accident occurs. This is also financed with a mandatory surcharge that goes into each of the existing policies in the Spanish insurance market. Normally, this fee is no more than between 0.7% and 0.8% of the total cost of the insurance. In the more than eighty years of history, the Consortium has accumulated stabilization funds of more than 10,000 million euros, so it could face major natural disasters.
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