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Mandatory Flood Insurance Gains Momentum in Germany
In a significant shift, a majority of Germans appear to support the mandatory insurance against natural disasters, particularly floods, proposed by the new federal government. According to a survey commissioned by comparison portal Verivox, nearly 40% of homeowners and tenants alike express support for the plan set forth by the Union and SPD.
The survey, conducted by market research institute Innofact, questioned a total of 2,054 participants aged between 18 and 79. It revealed that 78% of homeowners and 79% of tenants expressed approval for the compulsory insurance against elemental damages.
However, a point of contention remains: the potential cost of the mandatory insurance. While 78% of homeowners and 79% of tenants back the introduction, 15.9% of homeowners surveyed indicated they cannot afford additional costs, and another 28.5% expressed reluctance.
The proposed measures are in response to the billions in expenses incurred by the federal and state governments as a result of flooding. Major catastrophic floods often necessitate aid programs for those affected, placing a significant strain on public finances. These aid programs are costly, in part, because only about half of German residential buildings are currently insured against elemental damages.
The coalition agreement leaves some ambiguity regarding the future requirement of compulsory insurance for all homeowners, with the possibility of offering an opt-out option for those who prefer to forgo coverage.
German insurers have shown a more accommodating stance toward a mandatory insurance, though not without conditions. Jörg Asmussen, CEO of the GDV (German Insurance Association), noted, "The anchoring of elemental protection in the coalition agreement is an important signal." However, he stressed that protection alone is not sufficient; a comprehensive approach including stricter urban planning is necessary.
The insurers' proposal includes elements such as climate-resilient urban planning, the de-sealing of areas, binding construction stops in high-risk areas, and a climate risk assessment for building permits.
Another contentious issue concerns building in flood-prone regions. While building in floodplains is technically prohibited in Germany, loopholes allow exceptions. According to an analysis by the GDV, over 300,000 buildings in Germany are located in endangered areas, with 80% in provisionally or finally designated floodplains.
The federal and state governments remain cautious in confronting municipalities with this issue. Meanwhile, many politicians hesitate to advocate for stricter building planning, including Bavaria and its State Ministry for Housing, Building, and Transport, which views a blanket ban on building areas in certain zones critically.
A third contentious point revolves around who will ultimately bear the cost of the elemental insurance: homeowners or tenants as well. In principle, property owners may pass on the cost of building insurance to tenants, including elemental damages. However, the German Tenants’ Association has advocated for the removal of this provision from the operating cost regulation.
The Homeowners’ Association Haus+Grund opposes the introduction of mandatory insurance and the removal of elemental insurance from the list of recoverable operating costs. Instead, they propose a comprehensive prevention package against flooding, which includes refraining from building new areas in known danger zones and improving technical flood protection through dyke construction, river renaturation, and other measures.
At this point, it is unclear when the coalition's plan will become law. The Federal Ministry of Justice is working intensively on the implementation, but few details have been released due to the early stage of the process.
- Mandatory Insurance
- Natural Disaster
- Flooding
- Federal Government
- Flood
- Coalition Agreement
- SPD
- Verivox
- GDV
- Jörg Asmussen
- Heidelberg
- Munich
- Germany
- Elemental Damage
- The mandatory insurance against natural disasters, particularly floods, proposed by the new federal government is gaining momentum, as revealed in a survey commissioned by Verivox.
- Jörg Asmussen, CEO of the GDV, expressed support for the anchoring of elemental protection in the coalition agreement, but emphasized the need for a comprehensive approach that includes climate-resilient urban planning, de-sealing of areas, and a climate risk assessment for building permits.
- The federal government is working to implement the mandatory insurance plan, but it remains unclear when it will become law and who will ultimately bear the cost of the elemental insurance: homeowners or tenants.