Compulsory insurance against floods would be an exemption

Compulsory insurance against floods would be an exemption
Compulsory insurance against floods would be an exemption

The federal states are unanimously in favor of compulsory insurance for flood damage. But the traffic light coalition is resisting it – especially the FDP. Yet nothing would be more helpful, less bureaucratic and less expensive than compulsory insurance.

The obligation to have natural hazard insurance could be a real exemption. Let’s imagine this for a moment: After heavy rain, the water is knee-deep in the house. Now help is needed quickly. Because everyone is insured, there are clear structures and contacts at the insurers. There is no need for calls for donations. The state only has to pay for the damaged public infrastructure.

What’s more, the houses are also better protected: backwater valves work, basement windows are pressure-resistant, sandbags are ready. The better protected a house is, the lower the insurance premiums. Owners therefore have a direct financial incentive to prevent damage. All experience shows that this works.

Reality without compulsory insurance: Only every second person is insured

The situation is currently very different: only every second house or apartment owner is insured against natural hazards. Because they ignore the seemingly remote risk of flooding. Insurers are already talking about “flood dementia”. In most cases, even the backflow valves on the drains are not properly maintained. In fact, affected house owners should be left to pay for their losses. But the state cannot – and will not – let them down. Politicians stand in front of sandbags in rubber boots and promise “unbureaucratic help”. Voters would never forgive them for anything else.

But the help is rarely unbureaucratic. It always has to be clarified who will get which costs reimbursed by whom (the state, insurance, donations). The state’s structures are also usually overwhelmed. If a house or cellar is flooded, it can take months for financial help to arrive. The flood victims in the Ahr Valley can tell you all about it. In the end, many only get a fraction of their money reimbursed.

An obligation to simply offer insurance does not help

The federal states have recognized this dilemma and are unanimously (!) pushing for compulsory insurance. They are the ones who are regularly responsible for flood relief. But so far the traffic light coalition has resisted this, especially the FDP in the person of Federal Justice Minister Marco Buschmann. He speaks of more bureaucracy and higher housing costs due to compulsory insurance.

But the FDP’s alternative proposal that insurers should be obliged to offer insurance against natural hazards is pointless. In principle, brokers already have to do this. And despite severe flooding in recent years, the number of people insured against natural hazards is barely increasing.

Insurers are shirking their responsibility

In general, the insurers are the most disappointing in the debate. They too are fighting against compulsory insurance, although if set up correctly it would be a lucrative business – and they get lost in general explanations about flood protection. They should remember the basic idea of ​​insurance: as many shoulders as possible bear the individual risk.

Yes, compulsory insurance can cause hardship. For homeowners in particularly vulnerable areas, the compulsory contributions would be very high. Insurers would need state guarantees for particularly devastating floods. But all of this could be regulated fairly. And it would be much cheaper for the state than the inefficient emergency aid that is currently being distributed at great expense.

For fair, unbureaucratic help, everyone must have compulsory insurance

In the end, it is the taxpayers who suffer the damage. How fair is it that tenants in high-rise buildings have to pay taxes for the damages of homeowners on rivers and lakes? For this reason alone, flood damage should be regulated effectively, fairly and without red tape in the future. This can only be achieved if almost everyone is insured – and this (unfortunately) requires compulsory insurance.

There was already an attempt to introduce compulsory insurance in 2003, but it failed. But the traffic light government also put the brakes on one attempt: That was in 2022, shortly after the Ahr Valley flood, when the coalition did not want to burden homeowners with major costs due to inflation and energy prices. Now compulsory insurance threatens to fail again for short-sighted reasons. Flood damage caused by heavy rain, on the other hand, will continue to increase with climate change.

Source: Stern

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