Elementary insurance: Why property owners forego extreme weather protection - financial experts warn of increasing risks and premiums

Elementary insurance: Why property owners forego extreme weather protection - financial experts warn of increasing risks and premiums

According to a report from www.mdr.de,

The low insurance rate against natural hazards in Germany is raising more and more concerns as the risks caused by climate change are constantly increasing. According to GDV data, only about every second house nationwide is insured against extreme weather damage. This lack of coverage is particularly concerning given predictions that homeowners insurance premiums will double due to climate change.

The costs for natural hazard insurance vary depending on the flood risk class and heavy rain risk class. In low-risk areas, the premiums are around 90 euros per year for a standard house of 150 square meters, while in higher-risk areas the costs are in the three-digit range. However, higher deductibles can reduce rates. Despite the comparatively moderate costs, many property owners seem to forego adequate insurance coverage.

The discussion about a general insurance requirement for all buildings against extreme weather damage is ongoing. While some proposals are aimed at compulsory insurance, the insurance association and Allianz argue against such a measure. Instead, they are calling for increased prevention measures and adjustments to state building regulations in order to limit the effects of climate change.

Given the increasing risks and low insurance rates, it is crucial for property owners to become aware of natural hazards and take appropriate steps to insure their property. Otherwise, in the event of damage, they could be stuck with significant costs or be dependent on government support. It is important to find solutions that both protect property owners and limit the consequences of damage in times of climate change.