Merz government plans compulsory insurance: protection against floods for everyone!

Merz government plans compulsory insurance: protection against floods for everyone!

After the devastating flood disaster in southern Germany in 2024, the Merz government has presented plans to introduce compulsory insurance against natural hazards. The need for such protection is also emphasized by SPD Justice Minister Stefanie Hubig, who points out the risks for owners and tenants in connection with numerous weather extremes. The coalition agreement between the Union and the SPD therefore provides for expanding insurance coverage for natural hazards and ensuring solidarity-based insurance without overburdening citizens financially.

Natural damage, such as flooding, is currently not covered by all homeowners insurance policies. This means that the state often intervenes with taxpayers' money when large areas are devastated by extreme weather events. Hubig explains that aid should not depend on arbitrary political decisions. The new plans include the standardization of natural hazard protection in residential building insurance and should apply to both new contracts and existing contracts from a certain date.

The role of the insurance industry

According to the General Association of the German Insurance Industry (GDV), only 50 percent of private homes are currently insured against natural hazards. The damage caused by the flood disaster of 2024 amounts to billions and illustrates the need for action. The federal government sees the increasing weather extremes, which caused damage amounting to 5.5 billion euros last year, as a result of climate change. The GDV also welcomed the Merz government's initiative, but at the same time warns that compulsory insurance alone cannot prevent extreme weather events.

The deputy general manager of the GDV is therefore calling for additional measures, such as building bans in particularly vulnerable flood areas. The GDV supports the idea of ​​broad coverage and has submitted a proposal for natural hazard insurance with an opt-out. Residential building insurance should automatically include natural hazard coverage, with the insured being able to select or deselect this.

Climate protection and prevention

In order to ensure effective protection, the planned law should be passed during this legislative period. The discussion about compulsory insurance reflects a broader political debate about the increase in natural hazards such as heavy rain, floods and floods. Experts warn against simple solutions and call for a comprehensive overall concept that includes practical preventive measures.

This also includes the requirement for binding legal requirements for risk-conscious planning and construction. Similar to the British example of Flood Re, a public-private partnership could help create affordable insurance coverage. The federal government has recognized the need for action and sees the implementation of the measures outlined in the coalition agreement as crucial.

The insurance industry is ready to make its know-how and data available to address the challenges described. A functioning system to protect against natural hazards could not only provide security for affected citizens, but also reduce the financial burden on the state in the long term.