The 2021 flood disaster in North Rhine-Westphalia and Rhineland-Palatinate caused billions in damage. Government advisers call for compulsory insurance for building owners.
(Photo: dpa)
Berlin In view of the progressing climate change, the Advisory Council for Consumer Questions (SVRV) advises introducing compulsory insurance for natural hazards. This emerges from a position paper that is to be handed over to the Ministry of Consumer Protection on Thursday. “The flood disaster of the summer of 2021 showed that Germany is fully affected by climate change, but is not sufficiently adapted to the consequences of climate change,” says the 72-page document available to the Handelsblatt.
The flood disaster in North Rhine-Westphalia and Rhineland-Palatinate in the summer of 2021 caused damage in the billions. At least 180 people lost their lives as a result of the flooding, and the insured damage caused to residential buildings, household goods and businesses is considerable at almost eight billion euros, write the authors of the position paper.
“Another 30 billion euros for reconstruction have been and will be made available from federal flood aid,” it said. This financial ad hoc aid from the federal government is vitally important and an expression of an effective welfare state – “in view of the ongoing climate change and the associated challenges, they are not a model for the future”.
>> Read here: Lessons from the storm: how the insurance gap in Germany can be reduced
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After the storm disaster in the two federal states, Olaf Scholz (SPD) was basically open to compulsory elementary damage insurance. “The question is whether you want to impose this obligation on all citizens. That would make housing prices more expensive again, ”said Scholz at the time as Vice Chancellor and Minister of Finance. “First of all, the countries have to lead this debate. If there is an agreement, the federal government will certainly not oppose it.”
Insurance density varies in the federal states
Baden-Württemberg’s head of government, Winfried Kretschmann, sees good prospects for the reintroduction of compulsory insurance for natural hazards for all building owners in view of the increasing number of storms. If you see that there are now more frequent tornadoes in Europe, such compulsory insurance is important, said the Green politician in October 2021. All property owners must join a community of solidarity, otherwise there will be consequences that can no longer be easily managed .
In Baden-Württemberg, the insurance density against natural hazards is more than 90 percent due to earlier compulsory insurance in the federal state and is therefore still above average. Nationwide, only about half of the residential buildings are insured against natural hazard events that go beyond fire, storm and hail, criticizes the SVRV, which was founded in 2014 by the then Justice and Consumer Protection Minister Heiko Maas (SPD) as an independent advisory body.
Owners of residential buildings in Germany are currently not obliged to take out building insurance – but there has been a discussion about this for a long time. The General Association of the German Insurance Industry (GDV) and the Federation of Consumer Organizations (vzbv) have also presented concepts that aim to ensure that significantly more residential buildings are insured against natural hazards.
In Rhineland-Palatinate, the federal state that was particularly hard hit by the flash floods of summer 2021, the insurance density is only 37 percent, according to the panel. According to the SVRV, comprehensive insurance against natural hazards makes sense in times of progressive climate change, since every residential building in Germany could potentially be affected by a natural hazard: “In particular, heavy rain and hail can directly or indirectly affect all residential buildings in Germany.”
Majority of Germans for compulsory insurance
The SVRV therefore proposes compulsory insurance in the form of “basic insurance for residential buildings”. All homeowners would be required by law to insure their buildings against damage caused by nature. This basic insurance could then be individually extended, depending on personal financial possibilities and the risk attitude or risk situation.
The committee also had an investigation carried out into how the population feels about compulsory insurance and whether this would be constitutional. According to a representative online survey by the opinion research institute Infratest Dimap, the majority of Germans are in favor of compulsory insurance against natural hazards, but insurers have so far enjoyed rather little trust among the population. Climate change is also perceived as a rather abstract danger; the reference to one’s own danger is less concrete.
Another finding from the survey is that owners who do not have residential building elementary damage insurance feel well insured and protected even without it. The fact that only around half of the residential buildings are insured against natural hazards is not a coincidence, but rather the result of a conscious and to a certain extent rational decision, according to the committee: “The subjectively perceived risk is low, trust in insurers is often low in the event of a disaster Experience has shown that the state helps and there is also a great willingness to donate privately.”
Constitutional law: Compulsory insurance constitutional
The legal opinion, written by the constitutional lawyer Thorsten Kingreen from the University of Regensburg, comes to the conclusion that compulsory insurance, which would make all residential buildings more resilient to natural hazards without exception, is compatible with European Union law and German constitutional law.
In Kingreen’s view, compulsory insurance for natural hazards in residential buildings also has a social dimension. “Not only is there a regulatory interest in preventing homelessness and is it an urban planning concern to restore destroyed residential buildings, but there is also a public interest in sparing public budgets,” writes Kingreen.
In the event of major disasters, the state comes under political pressure to act, which in the past has always intensified into political payment obligations. This causes a so-called “charity hazard”, according to the lawyer. “Any damaging event for which the public purse is responsible discourages the willingness of property owners to seek insurance against natural hazards themselves and makes policyholders question why they should continue to insure themselves when public purses are responsible in an emergency .”
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