Rising costs in building insurance: Financial expert warns that premiums will double in the next ten years and calls for a package of measures.

Rising costs in building insurance: Financial expert warns that premiums will double in the next ten years and calls for a package of measures.

According to a report by www.rnd.de, German insurers are warning of massively rising building insurance costs due to increasing damage caused by climate change. Premiums could double within the next decade, making homeowners insurance unaffordable for many customers. The Association of the German Insurance Industry (GDV) is therefore calling on politicians to comprehensively prevent damage to buildings caused by flooding and other consequences of extreme weather, as well as a change in building law.

The increasing damage caused by climate change and the associated higher insured sums will lead to a significant increase in building insurance premiums. This could result in some customers no longer being able to afford the insurance. In the USA and Australia, home insurance is already very expensive or not available at all, which could indicate similar developments in Germany.

It is also being discussed whether all building owners should be required to take out insurance against natural hazards, as only half of all buildings in Germany are currently insured against such damage. However, the federal government warns that compulsory insurance will place additional burdens on households.

The insurance industry suggests that every homeowner be automatically offered an insurance policy against natural hazards, but this can be declined. In addition, the GDV is calling for measures such as a halt to construction in flood areas, prevention of climate damage as part of the state building regulations, a halt to surface sealing and a natural hazards portal on the Internet to raise risk awareness.

Through these measures, the risk could remain insurable on a large scale in the future despite the increasing damage. However, if the damage threshold of 30 billion euros is exceeded, the state should step in to protect the insurance industry from extremely high claims.

These developments show that climate change will have a significant impact on the insurance market and building insurance. Rising premiums and the discussion about compulsory insurance pose major challenges for the industry. It remains to be seen to what extent politicians will react to these developments and what measures will ultimately be taken to curb the uncontrolled increase in insurance costs.