Germany: floods trigger debate on mandatory natural disaster insurance

In Germany, following the floods in the south, debate has resumed on the need for mandatory home insurance against natural disasters. However, there is no consensus on this issue in the ruling coalition. This was reported by Spiegel.

The SPD and the Greens spoke in the Bundestag in favor of introducing compulsory insurance against natural disasters according to the “French model.” However, the Free Democrats reject the idea, insisting that it will not always be a feasible financial burden for building owners. 

Supporters of insurance argue that assistance to victims from the state budget also creates problems and that a mechanism is needed that is risk-oriented and not too burdensome. 

The CDU-CSU proposed a model whereby natural disaster insurance would be included by default in home insurance, and the client could opt out of this option if they wanted to, but then they could not count on state aid if something happened to the home. This idea was not supported by the majority. 

Justice Minister Marco Buschmann from the Free Democrats proposes that insurance companies should be obliged to offer home insurance against natural disasters and inform people about this option, but property owners should not be obliged to take out insurance. 

Last week, floods hit a number of areas in southern Germany, particularly in Bavaria. Floods affected thousands of households and claimed the lives of six people.

The catastrophic floods in northwestern Germany in July 2021 caused billions of dollars in damage and killed more than 180 people.