Last week's catastrophe that killed more than 210 people nationwide gutted buildings, swept away cars, inundated fields, and wrecked transport and power infrastructure in the wealthy eastern Valencia region.
Spain now faces its "biggest disaster for a climate event", said Mirenchu del Valle Schaan, president of the Spanish insurers' federation UNESPA.
It is too early to estimate the total costs but they will undoubtedly be "extremely high", Celedonio Villamayor, director of the CCS consortium responsible for paying out compensation after natural disasters, told public broadcaster TVE.
The head of the Valencia Chamber of Commerce, Jose Vicente Morata, told the same channel the final bill would be well north of 10 billion euros ($11 billion).
For comparison, the devastating July 2021 floods that claimed more than 200 lives in Germany, Belgium, France, Austria and the Netherlands cost almost $43 billion, according to reinsurer Swiss Re.
The central and Valencia regional governments' finances will be severely stretched, although Spain is seeking aid from the EU solidarity fund that can ease the burden.
Prime Minister Pedro Sanchez on Tuesday announced a series of measures worth 10.6 billion euros aimed at shielding and relaunching Valencia's economy which he compared to the state's intervention during the Covid-19 pandemic.
These included aid to small and medium-sized businesses, self-employed workers, tax relief and a three-month postponement to repayments of loans and mortgages.
Clearing debris and reconstructing obliterated infrastructure will also be financed with the central government, which has estimated those works at 2.6 billion euros.
- 'Incalculable consequences' -
An estimated 4,500 businesses located on the ground floors of buildings submerged by mud and water were affected, according to the Valencia Chamber of Commerce.
Dozens of shopping centres and industrial estates home to small and medium-sized businesses were damaged and transport companies lost their lorries.
The flooding of fields dealt a heavy blow to agriculture in the Valencia region, one of Spain's breadbaskets and a major citrus fruit exporter.
Regional agricultural trade union La Unio estimates 50,000 hectares (123,500 acres) of crops were affected.
Agroseguro, which manages Spanish agriculture insurance, believes the cost could rise to 150 million euros in the sector. Trade union Asaja described the losses as "catastrophic" with "incalculable consequences".
Spanish insurers rely on a common fund managed by the CCS that shares the cost across the sector in the event of a natural disaster.
The CCS therefore covers most of the compensation and insurers only directly pay out for peripheral damage in areas unaffected by the floods.
The system is "perfectly prepared to deal with this type of situation", said UNESPA head del Valle Schaan.
More than 72,000 claims have been submitted, said Economy Minister Carlos Cuerpo, who hopes for the first payouts this week.
vab/imm/rl
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