Financial expert warns: Half of homeowners are not insured against natural hazards

Financial expert warns: Half of homeowners are not insured against natural hazards

According to a report by www.fr.de, the Federal Council has pushed for the introduction of compulsory insurance for homeowners in order to better protect against storm damage due to advancing climate change. However, the introduction of such compulsory insurance is met with resistance, particularly from the FDP Ministry of Justice, which speaks out against categorical compulsory insurance. Instead, a compromise solution is being discussed that is intended to prevent the conclusion of “disproportionate” insurance, but could still exclude state aid in the event of damage. According to the report in the Bild newspaper, the costs for insurance against natural damage amount to between 85 and “significantly more than 750 euros” annually, depending on the regional risk classification.

The General Association of the German Insurance Industry (GDV) warns that damage due to climate change could occur much more frequently in the future and that this will affect premium prices and the range of insurance available. According to GDV boss Jörg Asmussen, premiums could double within the next ten years as a result of climate damage. A basis for this assessment is the progress report of the Intergovernmental Panel on Climate Change, which states that climate change is already causing more frequent and severe extreme weather events.

The introduction of compulsory insurance and increasing losses due to climate change could have a significant impact on the insurance market. Insurers in particular could be forced to give up the business because they can no longer bear the corresponding risks. Additionally, premium prices for homeowners are expected to increase significantly, which could result in financial burdens for consumers. In addition, the insurance market may need to restructure due to increasing risks and costs.

Looking at homeowners in Germany, almost half of whom are not insured against natural hazards, it is clear that the introduction of compulsory insurance will have a significant impact on the industry. It remains to be seen how the discussion about the introduction of compulsory insurance for homeowners in Germany will develop and what measures politicians will take to mitigate the consequences of climate change and the financial burden on consumers.