Security through natural hazard insurance: Useful for homeowners

Security through natural hazard insurance: Useful for homeowners

According to a report by amp.zdf.de, insurance against natural damage such as floods or landslides in Germany is only taken out by around 50 percent of homeowners. The state regularly steps in to fund damage and reconstruction during major disasters, which experts say creates an injustice because not all taxpayers should pay in the event of a disaster.

From an economic perspective, compulsory insurance for natural disasters makes perfect sense, as it would lead to a fairer distribution of costs in the event of natural disasters. A higher number of insurance policies against natural hazards would also lead to a reduction in the costs for the state or the general public in the event of damage. This would make the financial burdens following natural disasters easier to calculate and put on a broader basis.

The introduction of such compulsory insurance would have a direct impact on the insurance market, as the demand for corresponding insurance products would increase significantly. This would allow insurance companies in this segment to benefit while at the same time reducing costs for the state in the event of major disasters. The associated financial relief could also have a positive impact on households as the tax burden could be reduced in the event of disasters.

Overall, it is time to intensify the discussion about the introduction of compulsory insurance for natural disasters in order to achieve a fairer distribution of the costs of natural disasters in the long term. This would not only reduce the burden on the state and the general public, but also lead to financial benefits for the insurance industry and citizens.