With thousands of people evacuated and more than 150,000 hectares burned this year in Spain, one of the main questions among those affected is who pays for the damages and what aid they can receive. While the Government prepares the declaration of a severely affected area and new measures to protect workers affected by the fires, compensation depends on a combination of private insurance and public aid.
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Who pays for the damages caused by a fire?
As long as the person or property is insured, the material damages caused by a fire are the responsibility of private insurers, not the Insurance Compensation Consortium. This public body only intervenes in extraordinary risks, such as floods, earthquakes, or volcanic eruptions, but forest fires are outside its scope of action.
What does home insurance cover?
Most multi-risk home insurance policies include damages caused by fire and smoke. In addition to repairing or compensating the affected home and belongings, they usually cover expenses related to extinguishing the fire, debris removal, cleaning, or even the replacement of destroyed official documents, such as the ID card or property deeds.
According to the Spanish Union of Insurance Entities (UNESPA), if the home becomes uninhabitable, some policies also provide assistance to find temporary accommodation for the owners for a certain period. The extent of this aid will depend on the limits set in the contract regarding the amount, days, and other aspects.
What if a business or company catches fire?
Commercial and industrial insurance covers both damages to the building and to the furniture, machinery, or insured goods. Additionally, some policies include coverage for loss of profits if the activity must be halted as a direct consequence of the material damages caused by the fire.
However, if the business remains closed only due to an evacuation or lockdown order and has not suffered direct damages, this coverage usually does not activate unless expressly included in the contract.
What about cars?
Vehicles are covered against fire only if the policy includes that guarantee. It is included in comprehensive insurance, while in basic policies it depends on the coverages contracted.
Are agricultural and livestock operations protected?
Crops, plantations, and insured livestock operations are covered through Agroseguro’s agricultural insurance. The protection includes both damages caused by fire and, in some cases such as cereals, losses derived from the creation of firebreaks necessary to contain the fire. Farmers do not need to report the claim immediately; it is advisable to wait until the fire is controlled and it is possible to safely assess the damages.
The president of the Junta of Castilla y León, Alfonso Fernández Mañueco, announced via a message on his X account that this Thursday, at the Government Council meeting, a package of aid will be approved following the Ávila fire, the largest in Spain’s history. The fund will be allocated to evacuated families, farmers, livestock breeders, self-employed workers, and other affected parties.
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How much does the insurance compensate? How much will I be paid?
Compensation can never exceed the insured value of the property nor the limit established in the policy, known as the insured capital or sum insured. Therefore, the amount each affected person finally receives will depend on the coverages contracted before the fire.
UNESPA spokespeople explain that “in the case of buildings with several units, one must consider the insured capital of the community of owners’ policy, on one hand; and that appearing in each of the home or business insurance policies of the community owners, on the other.”
What if I don’t remember with which insurer I had the policy?
You can consult your usual broker, the bank through which the policy was contracted, or review the direct debits on your bank account to identify the company.
What public aid exists?
In addition to insurance compensation, the Government can approve the declaration of a severely affected area due to a civil protection emergency, traditionally known as a “catastrophic zone.”
This measure allows activating extraordinary aid for individuals, companies, and local administrations aimed at rebuilding infrastructure, repairing public services, supporting agricultural operations, or compensating certain damages not covered by insurance. These aids are complementary and do not replace the compensations corresponding to insurers when a policy is in force.
On the other hand, the Ministry of Labor is preparing a new protection package for workers who cannot attend their workplace due to the fires.
The measure, which is expected to be approved by the Council of Ministers through a royal decree-law, foresees that the State fully assumes both the salaries and social security contributions of these employees. It also plans to extend by five additional days the paid leave for bereavement for those affected by this emergency.
