Compulsory Natural Hazard Insurance for Homeowners Gains Popular Support
Homeowners prefer mandatory insurance coverage for basic damages
In a survey conducted by Verivox, the majority of homeowners in Germany endorse the implementation of compulsory insurance against natural hazards, such as floods and landslides. The agreement to mandate such insurance has been included in the coalition agreement.
A significant 78% of homeowners regard the introduction of this compulsory insurance as appropriate. Renters echo similar sentiments, with 79% supporting the measure. On average, homeowners are willing to pay an estimated €286 annually for this insurance coverage.
Nearly two-thirds (61%) of homeowners express concern about a potential increase in natural disasters in their region. Notably, 86% of those who express concern support the implementation of compulsory insurance.
However, the financial implications of this policy receive mixed responses. Slightly less than a fifth (16%) of the homeowners surveyed believe they cannot afford additional costs for their residential property, while 29% express reluctance to bear any further costs. Among homeowners without natural hazard insurance, one in five attributes this to costs associated with the insurance policies.
The exact costs will depend on several factors, including the value, size, and risk zone of the property. In high-risk areas, annual costs could amount to thousands of euros, according to Verivox expert Aljoscha Ziller.
In France, such compulsory insurance requires premiums to be determined based on the value of the insured property, rather than the risk associated with the location. However, only one in five (20%) German homeowners supports this approach. Approximately a third (33%) reject redistribution in principle, preferring a system in which everyone pays only for themselves. A third (38%) support a cost cap but not redistribution among all insured individuals.
Significantly, 79% of homeowners support a ban on new construction in areas particularly at risk of flooding. Among tenants, 68% support such legislation.
In accordance with the coalition agreement, the federal government plans to make residential building insurance contingent on natural hazard coverage in the future and to supplement existing contracts with such protection by a specified date. The finer details of this implementation are yet to be examined, according to Federal Minister of Justice Stefanie Hubig in a statement to the Augsburger Allgemeiner.
Although more than half (50%) of all private households in Germany are insured against natural disasters, the question of compulsory insurance remains under debate. Critics argue that such a requirement might lead to a neglect of flood protection measures in Germany, as insurance policies are currently often withheld or only offered at very high premiums in high-risk areas.
In mid-May, the market research institute Innofact surveyed a total of 1052 homeowners and 1002 tenants on behalf of Verivox, with the results representative of the target demographic.
The Council of homeowners and landlords is discussing the implementation of compulsory natural hazard insurance with general-news interest, as the majority of both homeowners and tenants support such a measure. The coalition agreement includes this potential policy, with over three-quarters of homeowners willing to pay an estimated €286 annually for coverage. In the debate surrounding the policy, political views on redistribution and cost caps have set a foundation for further discussion.
