Financial expert: Compulsory insurance against climate damage is urgently needed

Financial expert: Compulsory insurance against climate damage is urgently needed

According to a report by www.deutschlandfunk.de, the Prime Minister of Saxony-Anhalt, Reiner Haseloff, calls for the introduction of mandatory natural hazard insurance. He emphasized that there was damage not only to public infrastructure, but also to private individuals. With a view to climate change, such damaging events would certainly not decrease. Compulsory insurance therefore remains an urgent issue that has been on the agenda for a long time and is repeatedly called for by the Prime Minister.

Natural hazard insurance covers damage caused, for example, by floods, floods or snowfalls. In contrast, standard building insurance often only covers damage caused by storm or hail.

The introduction of mandatory natural hazard insurance could have far-reaching effects on the insurance market as well as on consumers and the construction industry. The increasing loss events due to climate change could lead to higher premiums for policyholders as insurance companies have to cover more risks. At the same time, the introduction of such compulsory insurance would affect building regulations and standards as property owners in areas with increased risk would be forced to take out this insurance.

The demand for mandatory natural hazard insurance by political leaders shows the urgency in view of the increasing risks from extreme weather events. It remains to be seen how politicians and the insurance industry will respond to these demands and to what extent they could change the market and consumer landscape.