Natural disasters in Spain: how the insurance compensation consortium works

When a major natural disaster occurs — a DANA, an earthquake, or a volcanic eruption — the same question always arises:

Is this covered by my insurance?

Spain has a system that is unique in Europe to deal with these extreme situations: the Insurance Compensation Consortium (CCS).

This is not a subsidy or public aid. It is an existing coverage that many policyholders only become aware of once the damage has already occurred.

What is the Insurance Compensation Consortium?

The Insurance Compensation Consortium is a public entity that acts as an insurer in cases of extraordinary risks, those that private insurance companies cannot assume due to their magnitude.

👉 Official website of the Insurance Compensation Consortium

Every time you take out an insurance policy for:

• Home
• Business
• Industry
• Homeowners associations
• Vehicles

you are paying a mandatory CCS premium, included in your policy.

Why do we pay the CCS premium?

The CCS premium creates a common fund that guarantees compensation even when damage is widespread and affects thousands of people simultaneously.

This system ensures that:

• Compensation is guaranteed
• Payments do not depend on a single insurer’s solvency
• The system responds even in large-scale catastrophes

When disaster strikes, the CCS responds.

Which natural disasters are covered?

The CCS covers so-called extraordinary risks, including:

• Extraordinary flooding (DANA)
• Earthquakes and tsunamis
• Volcanic eruptions
• Atypical cyclonic storms
• Meteorite and extraterrestrial body impacts

To be covered, two conditions must be met:

1. An active insurance policy at the time of the event
2. The insured property must be correctly declared

The La Palma volcano eruption: a real case

The 2021 eruption of the Cumbre Vieja volcano on La Palma was one of the most severe natural disasters in Spain’s recent history.

Thousands of homes, farms, and businesses were destroyed or buried by lava.

The CCS directly handled compensation, covering:

• Affected homes
• Insured assets
• Material damage, including total losses

According to official data, over €230 million was paid in compensation for this event alone.

👉 Official CCS information on the La Palma eruption

In situations like this, understanding how to properly file a claim is essential:

We help you claim correctly from the CCS after natural disasters

Earthquakes in Spain: a little-known coverage

Although infrequent, earthquakes are also covered by the CCS.

Events such as the Lorca earthquake showed that:

• Private insurers do not cover this risk
• The CCS compensates structural damage
• Homes, businesses, industries, and vehicles are covered

Compensation depends on how the property is insured, not just the damage suffered.

DANA events: the real cost

DANA-related flooding has become the most frequent extraordinary risk in Spain.

In recent severe episodes:

• Thousands of homes were flooded
• Businesses were forced to close
• Thousands of vehicles were declared total losses

According to CCS data and major economic media outlets, some DANA events have exceeded €600 million in compensation payments.

Sources:

• Insurance Compensation Consortium
• El País
• El Economista

In many cases, the CCS has been the only entity providing compensation, as extraordinary flooding is not covered by standard private insurance policies.

What many policyholders don’t know

Several key issues often reduce compensation:

• The CCS does not pay if there is no active insurance
• Claims are not automatic
• Incorrect insured amounts reduce payouts
• Poor claim handling can lead to financial losses

The difference between fair compensation and underpayment often lies in how the claim is managed.

Conclusion: a system that works — if used correctly

Spain has one of the strongest systems in Europe for covering natural disasters.

The CCS responds even in the worst scenarios.
However, receiving the correct compensation depends on:

• Having properly configured insurance
• Submitting the claim correctly
• Defending the policyholder’s rights

If you have suffered damage from flooding, DANA events, or other natural catastrophes, you can find more information here:

Insurance claims specialists
Learn more about our claims services

Being insured matters — but claiming correctly matters even more.