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Compulsory insurance or voluntary natural hazard insurance: Financial experts argue about the most effective flood protection
According to a report from www.lto.de, many people affected by floods and heavy rain cannot afford or do not receive voluntary insurance coverage. Compulsory flood insurance could help. But the BMJ is against it. The current floods in Germany have once again stimulated discussion about insurance protection against natural disasters. According to the General Association of the German Insurance Industry (GDV), only around 50 percent of buildings are currently insured against natural hazards such as flooding. The insurance density is even lower, particularly in affected areas such as Lower Saxony. The introduction of compulsory natural hazard insurance is being called for by consumer advocates and politicians. It is argued that mandatory insurance contributes to...
Compulsory insurance or voluntary natural hazard insurance: Financial experts argue about the most effective flood protection
According to a report by www.lto.de,
Many people affected by floods and heavy rain cannot afford or do not receive voluntary insurance coverage. Compulsory flood insurance could help. But the BMJ is against it.
The current floods in Germany have once again stimulated discussion about insurance protection against natural disasters. According to the General Association of the German Insurance Industry (GDV), only around 50 percent of buildings are currently insured against natural hazards such as flooding. The insurance density is even lower, particularly in affected areas such as Lower Saxony.
The introduction of compulsory natural hazard insurance is being called for by consumer advocates and politicians. It is argued that mandatory insurance could help reduce the financial impact of natural disasters on citizens. A legal opinion has shown that such an insurance requirement is compatible with European Union law and German constitutional law.
However, Federal Justice Minister Marco Buschmann (FDP) is against the introduction of mandatory natural hazard insurance. He argues that such a requirement would lead to higher costs for citizens and an increase in bureaucracy. The insurance industry estimates that the annual cost per single-family home would be between 100 and 2,000 euros. In addition, the total premiums for homeowners insurance will increase significantly in the coming years due to the effects of climate change.
Despite resistance from the BMJ and the insurance industry, the Greens and some federal states are pushing for the introduction of compulsory insurance. They argue that inaction is the most expensive option and that such protection is necessary to create greater security for those affected.
It remains to be seen whether the discussion about mandatory natural hazard insurance will lead to concrete legal regulations or whether preventative measures in construction and environmental law will be the government's focus. The impact of such an insurance requirement on the market, consumers and the insurance industry cannot yet be fully estimated.
Read the source article at www.lto.de