Natural hazard insurance: Is this mandatory for homeowners?

Natural hazard insurance: Is this mandatory for homeowners?

The federal government is planning a comprehensive reform in the area of ​​residential building insurance in order to increase the number of natural hazard insurance policies and make them the standard insurance for real estate. This was decided against the background of the increasing number of extreme weather-related damage, which has been discussed particularly since the record year of 2017. NDR reports that Schleswig-Holstein has launched an information campaign about this.

Michael Herte from the Schleswig-Holstein consumer advice center made positive comments about natural hazard insurance, but emphasizes that the decision should be left to the citizens. It is currently being examined whether an obligation to provide insurance against natural hazards should be introduced. As part of this regulation, existing residential building insurance could automatically be expanded to include natural hazard insurance, unless the insured actively decide against it. For this purpose, Provinzial Versicherung is discussing an opt-out model that is potentially viewed as positive.

Criticism and concerns

However, there are also numerous concerns. Uwe Ludka from Itzehoer Insurance warns of possible costs that could be redistributed by taxpayers to homeowners. He expects moderate price increases and sees open questions regarding coverage of weather events such as storm surges. The tenants' association in Schleswig-Holstein criticizes the fact that insurance costs should not appear in utility bills and calls for a fairer distribution of costs.

Alexander Blazek from Haus und Grund also has concerns and expects annual costs of 500 to 1000 euros, which could also affect tenants. Reported in this context Financial tip that Almost half of homeowners in Germany do not have natural hazard insurance. What is particularly alarming is that almost 50 percent of those affected by natural events remain uninsured, as the flood disaster in the Ahr Valley in 2021 made clear.

Protection against natural hazards

Michael Herte also warns against an “illusion of security”. To obtain insurance coverage, homeowners should proactively protect their properties from natural hazards. It is estimated that the Baltic Sea storm surge caused damage amounting to over 200 million euros in Schleswig-Holstein, which further underlines the need for broader natural hazard insurance.

In order to respond to the changed climatic conditions, the governments of the federal states have called for uniform insurance requirements. In March 2023, the Federal Council approved a resolution to introduce compulsory natural hazard insurance. Whether and when the law will be passed remains unclear, but a working group made up of the federal government, states and experts, which also includes the General Association of the German Insurance Industry (GDV), will be set up from autumn 2023 to develop proposals for implementation.