Compulsory insurance against floods: Minister of Justice announces reform!

Compulsory insurance against floods: Minister of Justice announces reform!

Rohrbach, Deutschland - Federal Minister of Justice Stefanie Hubig (SPD) has now announced compulsory insurance against elementary damage to residential buildings. This measure aims to better protect the citizens from the growing risks of natural disasters, which increase as a result of climate change. In a statement, Hubig said that it was essential not to overwhelm house owners and tenants. Therefore, the focus is on broad insurance coverage, which should also be accessible to those who are insured against floods and heavy rain. The planned draft law is to be introduced during this election period, whereby the exact details are currently being checked.

The need for such measures can be seen in the current damage balance: according to the GdV 2024 expected natural hazards of at least seven billion euros. The managing director Jörg Asmussen emphasizes that severe autumn and winter storms in particular could further increase the damage. In the first half of 2024, 3.9 billion euros in damage caused by natural events were already accounted for.

The condition of insurance

Hubig also explained the current situation in the area of ​​elementary damage. Many existing residential building insurance do not automatically include elementary damage, which often leads to a dependency on government aid when flooding occurs. A reform stipulates that residential building insurance for new contracts can only be offered with an elementary damage coverage. Existing contracts should be modified according to a certain key date. State reinsurance could also control the cost risks for insurance companies and thus also the premiums for homeowners.

The MDR reports that currently over 50 percent of private houses in Germany are insured against elementary damage. This number has increased significantly compared to the beginning of the 2000s, when only 19 percent were insured. Nevertheless, the challenge remains, since many homeowners underestimate the risks of heavy rain and floods. The GDV therefore calls for binding measures to adapt to climate consequences and emphasizes the need for a uniform regulation for construction in danger areas.

Financial effects and the future outlook

The damage caused by weather extremes should not be underestimated. In 2023, insured damage amounted to a total of 4.9 billion euros, which corresponds to the long -term average. However, the balance could be significantly higher for 2024. Particularly noteworthy is the flood disaster in June 2024, which caused damage of 4.1 billion euros in Bavaria and Baden-Württemberg, of which about half remained uninsured. These incidents further fueled the discussion about mandatory insurance.

In addition, it is pointed out that the risks of hail and storm increase in many regions, especially in the Alps. Here the Yahoo News Examples are already a reality in Germany in the near future becomes. Climate change will also affect insurance premiums, because it is expected that the premiums for residential building insurance could double in the coming years.

With the introduction of compulsory insurance against elementary damage, an important step in Germany could be in the right direction in order to be better prepared against the financial consequences of natural disasters both privately and by state.