German government plans mandatory insurance for natural disaster damage
Ministers Stefanie Hubig and Lars Klingbeil propose a law requiring residential building insurance to cover natural hazards like floods.
Key facts
- The draft requires new residential building insurance to cover natural hazards.
- Standard deductibles would be up to €20,000, with a cheaper minimum option up to €100,000.
- Existing policies would automatically extend to cover natural hazards after one year if owners do not respond.
- More than 40% of German residential buildings currently lack this coverage.
- The government is reviewing a legal ban on landlords passing these insurance costs to tenants.
Justice Minister Stefanie Hubig and Finance Minister Lars Klingbeil have drafted a bill to make insurance for natural hazards mandatory for new residential buildings, according to Der Spiegel. These hazards, called elementarschäden, include floods, heavy rain, and earthquakes. Hubig stated to the Kölner Stadt-Anzeiger that comprehensive coverage is needed because climate change is expected to increase damage to houses.
The draft proposes a standard deductible of up to €20,000. The Justice Ministry is also examining a minimum insurance option that is cheaper but carries a deductible of up to €100,000. According to FAZ, those choosing this minimum coverage would lose their claim to state aid.
For existing insurance policies, the plan would automatically extend coverage to natural hazards after one year if the owner does not react to an offer from the insurer. The cost of the policy would depend on the building's value and its risk location.
FAZ reports that the Union and the insurance industry prefer an 'opt-out' model to maintain homeowner choice. FAZ describes the SPD-led plan as a state intervention that could increase costs and restrict freedom.
Context
In Germany, standard home insurance typically covers fire and storm but not floods. Following the 2021 Ahrtal floods, the government seeks to reduce reliance on state aid for uninsured homeowners.
How outlets headlined it
How this was made
Compiled by our AI newsroom from 2 independent outlets, checked by a separate AI editor against the sources. Only claims found in the sources are reported. Spot an error? Every source is linked below.
Correction or source request? simoneggert16@gmail.com
Open reader debate: Factual contributions and additions are synchronized directly in real time across all readers.
Loading contributions from cloud server…
Reader Discussion & Community Notes