Floods
What compulsory insurance against natural hazards would mean
Heavy, persistent rain caused rivers to overflow their banks and flood over the Pentecost weekend (symbolic image)
© David Young/ / Picture Alliance
After the current floods in Germany, discussions about compulsory insurance against natural hazards are becoming louder. What would a launch mean for consumers?
The recent floods and the resulting damage are heating up the discussion about one Compulsory insurance against natural hazards. On June 20, the state premiers will discuss this with Chancellor Olaf Scholz (SPD) in Berlin. A spokeswoman for the Federal Ministry of Justice said this on Wednesday. The group will discuss the results of four meetings of a corresponding working group. But what would compulsory insurance for natural hazards mean?
What are natural hazards anyway?
Natural damage is damage caused by nature. This includes damage caused by floods, storms or landslides. Although it is generally not possible to establish a direct causal connection between severe weather events and climate change, scientific findings show that the probability and intensity of extreme weather events is increasing significantly as a result of global warming.
Who demands compulsory insurance?
The Federal Council: In a resolution by the Prime Minister’s Conference on March 6th, the traffic light government is called on to “introduce nationwide compulsory insurance for natural hazard damage, which should also include storm surge damage.” However, Justice Minister Marco Buschmann (FDP) is against such a mandatory policy, as his spokeswoman explained.
From the point of view of the Federal Ministry of Justice, “the introduction of a nationwide compulsory insurance against natural hazards does not solve the problem of the risk of building damage and the associated financial burden for citizens,” explained the spokeswoman. She referred, among other things, to the bureaucratic effort involved in the necessary checks. “With several million residential buildings in Germany and the insurance law expertise required for this, this check is very complex and costly.”
How much does insurance for natural damage cost?
A compulsory insurance policy would “make living more expensive throughout Germany,” says the Federal Ministry of Justice. According to the ministry, the insurance industry estimates the costs per single-family home to be between 100 and 2,000 euros per year.
So far only a few people in Germany have insurance. On a national average, 54 percent are insured against all natural hazards, according to the General Association of Insurers.
“The decision as to whether homeowners want to insure their residential buildings against natural hazards should, in principle, be left to each individual,” concludes the spokeswoman for the Federal Ministry of Justice. Only with “more prevention” can it be possible to effectively prevent or minimize damage. “The states also have a duty here.”
Pictures of the flood
“Saarland has been in a state of emergency for around 36 hours”
Union parties demand opt-out rights
The CDU and CSU are demanding that new residential building insurance policies should only be offered with natural hazard cover. However, the insured should have the opportunity to opt out of this option after being informed of the risk of having to bear the damage themselves.
Compulsory insurance with an opt-out right is necessary for the Union because premiums could rise exorbitantly in heavily polluted regions, “so that people could forego taking out the insurance in the trust that the state will step in in the event of damage,” he said CSU member of the Bundestag Volker Ullrich from the “Augsburger Allgemeine”. This means that “ultimately all taxpayers would have to be responsible for individual damages”.
Sources:daily NewsAFP