Bavaria shares the costs of insurance against drought, frost and floods with farmers.

Bavaria shares the costs of insurance against drought, frost and floods with farmers.

According to a report by amp2.handelsblatt.com, Bavaria and farmers are now sharing the cost of insurance against drought, frost and floods. In this way, the Free State wants to avoid having to step in after every natural disaster. Agriculture is particularly affected by the effects of climate change, which is why new insurance concepts have been developed.

This decision by the Free State of Bavaria has possible effects on the market, consumers and the agricultural industry. The introduction of this multi-peril insurance could result in claims being insured more frequently and reduce the need for government assistance after natural disasters. This could also lead to similar measures being taken in the other 15 federal states to support farmers with insurance contributions.

Insurance premiums for agriculture are currently high, which is why many farmers are not insured against certain natural hazards. State support for insurance contributions in Bavaria could lead to more farmers taking out insurance as costs are reduced. However, farmers remain free to decide whether they want to insure themselves against natural hazards or not.

However, it is questionable whether agricultural multi-peril insurance will actually lead to a reduced demand for government assistance in the event of a claim. Government support should provide an incentive to avoid damage through preventative measures.

Supporting the Free State of Bavaria with insurance contributions is a step in the right direction to help farmers in times of climate change. It remains to be seen whether other federal states will follow this example and take similar measures to support their farmers.

Source: According to a report by amp2.handelsblatt.com