Compulsory insurance against climate damage: This is what homeowners need to know now!

Compulsory insurance against climate damage: This is what homeowners need to know now!

The federal government is planning a far-reaching reform in the area of ​​residential building insurance, which will better protect homeowners from climate damage in the future. In a coalition agreement, the SPD and CDU decided to introduce compulsory insurance against natural hazards. This measure was formulated as a response to the devastating flood damage that occurred particularly in southern Germany last year. Federal Justice Minister Stefanie Hubig (SPD) announced that compulsory insurance should be introduced during the current legislative period. The aim is to avoid financial strain for homeowners and tenants, says Hubig.

However, only around 54% of private homes in Germany are currently insured against natural damage such as floods. Despite this number, extreme weather events cause billions of euros in damage every year; most recently, for example, 5.5 billion euros in damage was forecast for 2024. The flood events in the Ahr Valley in 2021 led to insurance losses of almost 9 billion euros. Experts warn that compulsory insurance can mean additional annual costs of between 120 and over 1,600 euros for homeowners, depending on the danger zone of the residential property. Landlords also have the option of passing on the additional costs to their tenants, which could lead to further financial burdens.

Details of the planned compulsory insurance

At the core of the planned reform is compulsory insurance against heavy rain, floods and other natural disasters. These requirements initially apply to all new contracts in the area of ​​residential building insurance, while existing contracts must be expanded to include natural hazard insurance by a certain date. Government reinsurance will be introduced to help control risks and costs for private insurance companies, thereby keeping homeowners' premiums stable.

The planned reform aims to distribute the risks arising from climate change and natural disasters more fairly. Professor Tobias Just emphasizes that compulsory insurance could bring long-term benefits for the economy, particularly through better risk distribution. Nevertheless, critics warn that the introduction of compulsory insurance could potentially reduce the burden on the state, thereby neglecting investments in preventative protective measures.

Regions in Germany that are particularly at risk are Saxony, Thuringia and Rhineland-Palatinate, where a total of more than 320,000 addresses are classified as at risk of flooding. Among other things, the government is considering an “opt-out solution” for existing homeowners to reduce financial hardship. The coming months will be informative as to how these legislative efforts will be implemented and what impact they will have on homeowners in Germany.

fr.de reports that...
focus.de provides further information about…