Function and Objective

It is the Consorcio's commitment to satisfy the indemnities deriving from extraordinary risks to those Insured persons who, having paid the corresponding surcharges, do not have cover for the extraordinary risk in question in the insurance policy contracted with a company in the market or, having contracted such cover, find that the insurance company cannot meet its indemnification obligations because it is bankrupt, in administration or is in liquidation.

The Consorcio's objective is to indemnify, by way of compensation, and in the cases mentioned above, those losses deriving from extraordinary events that take place in Spain and affect risks therein located. In the event of extraordinary risks that occur abroad, the Consorcio will compensate personal damage if the policy holder is resident in Spain.

Indemnifiable losses: Direct damage and loss of profits

For the purposes of the Consorcio cover, losses will be considered to be direct damage to persons and property, as well as the loss of profits when these are the result of said damages to property and represent an alteration of the normal results of the economic activity of the insured party and derive from the stoppage, suspension, or reduction of productive processes or the business of said activity.

Risks covered

It is characteristic of the Spanish system to define the catastrophic risks that are covered in consideration of the enormous loss potential that could be generated, but without conditioning the protection if there are occurrences that affect a great number of insured people or a wide expanse of territory, nor in the case of substantial damages that could lead to the event as being described as "catastrophic". It is possible that the event might only affect a sole insured party, who would have full rights to being indemnified but which, on the other hand, would not require the public authorities to issue an official declaration that there has been a "catastrophe" or that there is a "catastrophic area". The cover is automatic once one of the covered events has occurred, these being as follows:

a. Natural phenomena: Extraordinary floods, earthquake, seaquake, volcanic eruption, atypical cyclonic storms and the falling of astronomic (sidereal) bodies or meteorites.

The risk that causes most damage in Spain is flood and, for the purposes of the cover this is understood to be the flooding of ground as a result of rainfall or thawing snow; from water emanating from lakes with a natural outlet, from estuaries or rivers or natural surface water courses when these break their normal channels. Likewise, the cover includes the battering of coastal waters, even if there is no flooding. However, not included in this concept of flooding are the results of rainfall falling directly on the insured risk, or that collected by its roof or roof terrace, its drainage network or its patios, and neither is that flooding which is occasioned by the breakage of dams, canals, sewerage systems, water collectors or other artificial subterranean water courses, unless such breakage has come about as a direct consequence of an extraordinary event covered by the Consorcio.

The cover for atypical cyclonic storm includes, amongst others, tornadoes and extraordinary winds (gusts exceeding 135 Km/hr.), in accordance with the Extraordinary Risks Insurance Regulations.

b. Those occasioned violently as a consequence of terrorism, rebellion, sedition, riot and popular uprising.

c. Deeds of or actions by the Armed Forces or the Security Forces in times of peace.