Merz's compulsory insurance: Are we finally protecting our houses from floods?

Merz's compulsory insurance: Are we finally protecting our houses from floods?

The new compulsory insurance for homeowners is a central issue for the black-red government under Chancellor Friedrich Merz (CDU). The coalition agreement stipulated that in the future every new building insurance must also include natural hazard insurance. This is a response to the devastating flood disasters in Germany, particularly those in the Ahr Valley in 2021 and the floods in southern Germany in 2024.

Current surveys show that 39% of Germans support an obligation to have natural hazard insurance. These are the results of a study by the Ifo Institute, which was carried out among more than 8,000 households and 639 companies. While 27% are against it, many see solidarity insurance as fairer than ad hoc state aid. The attitude towards compulsory insurance has changed, particularly in areas that are considered to be less at risk from flooding.

Background and costs

The flood disaster in the Ahr Valley resulted in damages of over 40 billion euros. Only around 50% of residential buildings were insured against natural hazards, which further fueled the discussion about compulsory insurance. The Federal Council has now called for insurance against flood and heavy rain damage to be integrated into existing building insurance. However, the General Association of the German Insurance Industry (GDV) does not see any major problems with the awarding of insurance.

The costs for natural hazard insurance vary between 300 and 1,300 euros annually for an average single-family home with 150 square meters. Factors such as location, house size and year of construction play a crucial role. In Germany, only around 50% of homeowners are insured against natural hazards, which is due to high costs or rejections by insurers in high-risk zones, [ZDF] reports.

Political pressure and regional support

The debate about compulsory insurance continues to be intense. After the floods in Bavaria and Baden-Württemberg, Bavaria's Prime Minister Markus Söder is calling for compulsory national insurance. The states agree that increased private insurance is necessary to relieve the burden on taxpayers. The Saarland state government also announced support of up to 75,000 euros for severely affected homeowners.

Political pressure on the federal government is growing, especially in view of the repeated flood disasters. In response, Chancellor Olaf Scholz assured the affected areas of support. Nevertheless, the FDP is skeptical, as the party warns of possible high costs and a doubling of insurance premiums in the next ten years. The next consultation between the states and the federal government will take place on June 20th to discuss the plans for compulsory insurance.

The discussion about mandatory natural hazard insurance remains an explosive topic in German politics and is being followed with great interest by citizens.