Compulsory insurance or prevention? How to protect your home!

Compulsory insurance or prevention? How to protect your home!

The debate about mandatory natural hazard insurance is gaining momentum, especially in the context of increasing damage caused by heavy rain, floods and other extreme weather events, which are intensified by climate change. The current coalition agreement provides for such insurance, but experts express concerns about its sole introduction. Loud cash-online.de A lack of risk-appropriate premium design and targeted prevention measures could create false incentives.

The actuaries are therefore demanding a comprehensive overall concept from politicians that takes the following points into account: risk-based premiums, solidarity-based premium compensation only for extreme risks and secured accumulation protection. A state reinsurer with a stop-loss guarantee could be integrated to minimize the risk for insurers.

Public responsibility and preventive measures

A crucial aspect in this debate is the responsibility of the public sector in spatial and land-use planning. This should be reflected in a clear strategy for flood protection and the designation of building areas. Happacher from the German Actuarial Association (DAV) points out that compulsory insurance can only function effectively if it is accompanied by government responsibility and reliable risk models. The goal must be to prevent damage before it occurs.

According to information from Consumer advice center Insurers decide on applications for natural hazard insurance based on the history of damage over the last few years or even decades. Insurability is determined according to risk classes, which are based on the statistical frequency of flood events.

Zoning system and risk classes

The zoning system for flooding, backwater and heavy rain (ZÜRS) distinguishes between four risk regions:

• Klasse 4 (hohe Gefährdung): Hochwasser statistisch einmal in 10 Jahren
• Klasse 3 (mittlere Gefährdung): Hochwasser statistisch einmal in 10-100 Jahren
• Klasse 2 (geringe Gefährdung): Hochwasser statistisch einmal in 100-200 Jahren oder durch höhere Deiche geschützt
• Klasse 1 (sehr geringe Gefährdung): Hochwasser statistisch seltener als einmal alle 200 Jahre

Another criterion for assessing insurance coverage is the proximity of a stream to the building. In particular, owners in risk class 4 only have a chance of elementary protection if they are prepared to pay extremely high insurance premiums. Insurance coverage can also be refused if water has repeatedly leaked into the basement.

The final decision on insurance coverage and the associated conditions always rests with the insurer, which increases uncertainty for many homeowners. In this complex interplay of increasing weather extremes and the challenges of a functioning insurance system, a multidimensional approach is required in order to make optimal use of the effect of preventive measures.