INSURANCE EXCLUSIONS - ACTS OF GOD AND THE CONSORCIO

6th April 2013

Our Community satellite dish was blown down and damaged the other day.
The Community President called an informal meeting to discuss the repair.

The Administrator said that it was not covered by insurance because the wind was stronger than 80 Km per hour.

If you know, please would you confirm if the figure of 80 KPH is correct?

It is not difficult to see why Spain has the Consorcio into which I understand a proportion of all premiums is paid.
A disaster fund is clearly a necessity for situations like the terrible earthquake at Lorca in 2011.

With respect to the maximum wind speed for claims, some comparisons may help -

80 KPH = 50 MPH = 22.2 metres per second = 43.2 Nautical Miles per hour = Force 9 on the Beaufort scale.

If the upper limit of wind speed is indeed just 80 KPH for claims to be considered, it seems very low to me.
What hope would there be for householders living in Northern Britain?

If the figure of 80 KPH is correct, how is the wind speed at our Community measured and by whom?

Where is the information held?

How is it possible to access the information for a particular time on a particular day?

Are there other similar blanket exclusions enshrined in Spanish Insurance Law which we should aware of?

I and several of my neighbours who would be very grateful to know if you could tell us or refer us to somewhere where we may inform ourselves please.

Dai.

 It is usually the converse with Spanish insurance. The wind speed has to be greater than a certain amount and as recorded at a local meteorlogical station. Sure the administrator did not mistranslate?

Juan

5th Apeil 2013

Dear Juan,

Thank you very much indeed for your response.

I am not sure where the closest Met station is or even how to check their historical records even for the last week.
I get my weather forecast info based on San Javier 20Km or so away.
We are at the other end of the Mar Menor.

Dai.

 Try here for a start.

www.aemet.es/es/eltiempo/prediccion/municipios/san-javier-id30035

Saludos

Juan

5th April 2013

Dear Juan,

Thank you very much for the link.
It is much more detailed than the forecast I usually use.

It is still a forecast though and what would help us I think is a record of the actual wind strength for a given time on a given day in the past.

Dai.

 I think if you or you administrator contact them they will have the records. They are the government agency/

Juan

5th April 2013

Thank you very much indeed for that Juan.

I will give it a try.

Dai.

 I hope you have your spaceship insured for all drivers though.

Juan

6th April 2013

Dear Tamara,

Thank you very much indeed for that.
We have both had a chuckle.

You will of course have your own spaceship covered - minimum space legal at least so there is no point in covering the dwelling.

It may be handy to consider cover against errant asteroids and to have a video camera on the bridge to film near misses like they do in modern-day sputniks.

Dai.

Tamara, the "insured event" would read "aerial devices" in the UK - so if a Boeing 747 landed on your roof, or a part of any aircraft dropped on it etc the policy would pay for the repair - perhaps your insurer did a cheap and cheerful Google translation, or is having a laugh.

Dai, your initial query - the Administrator said "it was not covered by insurance because the wind was stronger than 80 Km per hour" seems totally wrong to me.  There is no gap between the insurance cover and that provided by the Consortium and if it was a fortuitous event as indicated the insurer should deal with the claim regardless and claim back themselves if the Government scheme allows them.  It's a straightforward process.

If I were you I would ask to see the policy or speak to the insurers direct yourself.  Something wrong somewhere.

7th April 2013

Dear Acer,

Thank you very much indeed for explaining the principle of the cover.

I have had some difficulty in understanding why our Community should NOT be covered.
We pay the premium asked of us so why should we stand the cost of insured events ourselves.
It would be contradictory.

I will make some enquiries direct with the insurers office.

The whole process of the insurance has been something of a mystery which needs to be looked into.

Your help is most welcome.

Thank you.

Dai.

Hi Tamara,

All I can say is - that's weird!  

If you live near an airport I would check that your insurance policy still extends to include damage by falling debris from aircraft etc.   But obviously of modest concern - possibly a larger chance than damage being caused by an alien spaceship, but only just.

7th April 2013

Dear Acer,

Your suggestion that an insurer should meet a claim and then re-claim from the Consorcio if necessary  is very helpful.

Please would you give me the details of the source document so I can raise the matter with our President and Administrator?

It would be very helpful to be able to point them to a document to help their understanding.

Dai.

Dear Dai,

Thanks for yours - I have to go somewhere right now and will post later, probably tomorrow.  But for my sins I worked in commercial insurance placing risks around the world for multi nationals and that's the way it's done.

As I said I would ask to see the policy - I just wonder if it exists as what you've relayed does not seem right to me.  A problem can be if the premium is not paid promptly - then the Consortium may decline a claim.  I'm obviously guessing, but the reason for the claim being turned down does not make sense.

7th April 2013

Dear Acer,

I am very grateful to you for taking an interest in this matter.

The insurance was changed at renewal last August whilst I was President.
There were some anomalies in that the Administrator did not follow my instructions and placed the business with the same company but through another agent - not the one who had surveyed the the building and made all the effort.
The reason given was that a further discount had been obtained from the agent who had expended no resources in obtaining the business.
I agreed provided that there was no reduction in the cover I had negotiated.

I was not comforatble with the ethics of the change of agent.
Owners now no longer have an option to benefit from the 10% discount offered by the agent with whom I had negotiated.
The total of the potential loss to owners as a result is far greater than the discount negotiated by the Administrator.
The matter should have been viewed as a whole rather in isolation.
Unfortunately I was in GB at the time and even had to arrange for one of our Spanish owners to take a letter in to (and get a signature for) the former insurance company to notify them that we would not be renewing.
This needed to be done with two clear months before the date for renewal.

The buildings insurance is one of the larger expenses of the Community.
I felt that it should be looked at carefully.
Having said that, I discovered that insurance could have been voided by the fact that the fire detection and warning system and fire extinguishers in the building had not been maintained since installation 7 years earlier.

So, it would seem that the tings to ask about are:

1. Does a policy exist?

2. Have premiums been paid promptly as they fall due?

3. Has the insurer been notified of the damage?

Many a slip - and there seem plenty to be aware not to make.

Dai.

Dear Dai,

Thanks for yours. I think you are right to be wary.  I have only had limited direct dealings with insurers in Spain and I am appalled by the lack of knowledge and dubious deals that are part of the culture. They are 50 years or so behind the UK and there seems little or no regulation.

I was struck by your first posting.  You mentioned that the local wind speed was noted as being 80 km per hour which would normally be accepted as being one of the vital components needed to prove a valid claim under the "storm peril".  Although the Beaufort scale is a starting point it is not too rigid as it is accepted that within a weather condition there will be variations - gusts that might exceed the tight defiinion of the Beaufort scale.  Wind strength can often be more than at the official recording point, so insurers are obliged to be a bit flexible.

To have a valid claim you need to be able to prove that there was a good probability of storm force winds that caused the damage and that this was the proximate (direct) cause of loss.   A frequent example of claims which are turned down where another factor is involved is damage to flat asphalt roofs which are past their sell by date - lack of maintenance etc.  For your claim you would need to show that the aerial was properly secured etc - but this should be straightforward.

I just cannot understand why your Administrator should imply that the wind speed was too much to be accepted by the insurers.  That's not the way it works.  By having effected insurance cover you have protection under both the insurance and the Consortium - this is effectively compulsory for certain catastrophe perils in Spain (and many other countries).  Part of the premium you pay goes to the Consortium.   If the government had for example declared a cyclone and said that they would meet all related insured claims under the fund then the claim would be met by the fund.  But if the Consortium fund is not operative the insurers should pay under their policy.

I'm in Spain currently and do not have access to any of my old books, but the principle is really quite basic.  Either the insurer or Administrator has got their facts wrong, or there is something else awry.  As I mentioned I would start by asking to see a copy of the policy - then I would ask for an explanation in writing from the insurer.

I hope this helps - feel free to PM me if you wish.

Good luck.

But the Administrators comments does not make sense - you mention that he implied that the wind speed was said to be

8th April 2013

Dear Acer,

Thank you very much indeed for taking the trouble to explain in such detail.

What you say about the rather broad nature of the Beaufort classification is true.
As a sailor I was always told to expect gusts of up to two forces stronger than the general force at the time.
I used the comparisons to help our reader to understand 80 KPH in whatever unit is familiar.

Clearly it is an insurer's duty to shareholders to ameliorate liability wherever possible.

In this instance there were 3 witnesses.
Our daughter and the wife of the Community's Caretaker saw the dish fall after a very strong gust of wind.
The third witness reported what he described as a whirlwind which threw his terrace furniture around within 20 metres or so of the dish.

I think I am getting the picture now but will need to make sure I have understood everything you say before galloping off in all directions.

The Administrator may have confused the words 'under' and 'over' and used 'over' instead of 'under'.
I suppose I must take some of the blame for that I am afraid.
I spent hours trying to teach our Adminstrator English last year, but clearly insufficient homework has been done since.
It is really annoying that it is the little words in most languages which are most critical for good communication.

Be that as it may, if we assume that the correct word to use was 'under', then must we assume that the insurers put the failure down to poor workmanship?
If that is the case, I wonder why the Administrator and the President are negotiating with the person who was responsible for the workmanship if that is the cause of the failure.

Today I have communicated with another installer who was not very complimentary about the workmanship he saw in the images I sent to him.
I am also hoping to hear from another agent for the same insurer with whom our own property is insured.

I hope to be considerably wiser soon but am philosophical and expect to be poorer in spite of the extra wisdom!
That always seems to be the unbreakable rule here in Spain as far as we are concerned.

Keep safe and well,

Best wishes,

Dai.