Almost a week after the fire in a building in Valencia, those affected still have some certainties and many doubts about the compensation they will receive from their insurance.
On the one hand, there is what they receive for the content, which they have already been paid for in many cases.
But, on the other hand, the final payment will depend on what happens with the expert opinion and the value determined for reconstruction.
Then a range of possibilities will open up in which the decision will be up to the neighborhood community: whether to choose to restore the building, either with the existing structure if it is viable or after its demolition and construction from scratch, or receive the money and sell. the plot to distribute among the owners.
Different alternatives, although only one answer can be given, the same for everyone.
That is, the neighbors must reach a meeting point.
“The community is assured of the reconstruction of the property, with similar material qualities, on land that is not in the community insurance contract because the land is not lost,” say sources from different insurers in the country with affected clients.
That is, both community insurance and individual home insurance, on the continent, cover reconstruction.
“Multi-risk insurance has coverage against fires and includes demolition and debris removal expenses,” add sources from the Unespa employer association.
Therefore, compensation is pending the value determined by the experts, although the conditions of the particular contracts and the capital covered will also have an influence.
The City Council, the scientific police and insurers with affected clients intervene in the technical inspection work, who have transferred their specialized teams to the area.
These works can be delayed for weeks, according to sources familiar with the analyses, until determining whether it is viable to maintain and reconstruct the building on the current structure or not.
The leadership of these works has been assumed by Mapfre, which had home insurance for 25 homes and that of the community.
According to sources in the sector, the figure covered by said community insurance is around 26.5 million, as
Expansión
advanced .
The possible declaration of ruin of the building will depend on the cost of the reconstruction, whether it is higher than what its demolition and new construction would cost or not, as well as in terms of efficiency.
Of course, these compensations do not specify what this payment is used for, a subsequent decision that corresponds to the owners.
Decision agreed between neighbors
“First, the safety of the area must be determined, what happens to the structure, and when there is a conclusion of the technical analyses, the neighbors will have to unanimously decide their choice.
Different solutions cannot be given, there will be only one for everyone.
There will have to be an agreement,” adds another source from one of the country's main insurance companies.
Thus, the value stipulated as total compensation may be transferred to the association in which those affected are formed and which commissions its reconstruction.
Or it can be distributed among the owners along with the amount of the sale of the lot.
On this issue, there is also a concurrence between home insurance and community insurance, which do not add compensation but rather distribute the payment.
That is, there will be a part that corresponds to the home insurance and another to the community insurance until reaching the amount that is calculated as compensation for this concept.
“The amounts disbursed may not exceed in any case the value of the destroyed property or the limit stipulated in the contract,” explains Unespa in a statement.
Another thing is what is covered by the content, which according to industry sources is usually
underinsured
.
This compensation for content has already been advanced and the companies have made payment available to users quickly.
Then there is uninhabitability, which has also been made easier, so insurers are helping in the search for temporary accommodation.
Mortgage-linked insurance
Regarding private homeowners insurance, there are generally two types of home insurance: one, which covers the contents and contents of the home.
And another that is linked to the mortgage loan, where there is an assignment in favor of the bank and the compensation is used to cover the outstanding balance and cancel the debt.
“It is a previously acquired commitment and the entity has preferential right to collection,” add financial and insurance sources.
In practice, if the neighbors decide to collect the money and not rebuild the building, the client with insurance linked to their mortgage will receive the difference between what remains to be paid on the loan and what is covered by the insurance.
For example, if the amount determined to receive is 100,000 euros and he had 50,000 euros left on the mortgage, he would only receive the other 50,000 euros.
It remains to be seen how this issue is resolved if it is decided to rebuild the building.
In theory, the bank could claim the outstanding amount and cancel the mortgage.
Although it is expected that there will be agreements with the owners so that this debt is transferred to a new loan on the rebuilt home.
“The compensation, in principle, will be used to pay for the reconstruction, not the outstanding mortgages,” explain sources from another of the insurers involved.
For this to happen, there is the complicity of the entities that are facilitating the process.
For example, Santander has already paid 3,000 euros to those affected and has approved a six-month grace period for its mortgage holders.
What happens to the uninsured?
As usually happens in this type of tragedies, the worst off are those who did not have home insurance, as already happened with those affected by the eruption of the La Palma volcano.
In these cases, they will not receive any compensation for the content they have and would be at the expense of public aid.
Of course, on this occasion they at least had the community insurance that covers the continent (structure of the building and its hypothetical reconstruction).
In this case, if the neighbors decide to rebuild the residential building, the compensation will guarantee its construction with qualities similar to those it had.
And if the community of homeowners decides to make improvements, they will have to pay for them together, via spill, without taking into account whether they had home insurance or not.
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