Consumer protection: ZEV for compulsory insurance for French model

Consumer protection: ZEV for compulsory insurance for French model
Consumer protection: ZEV for compulsory insurance for French model

Flood disasters also occur in France. Almost all households are insured against natural hazards. In the German debate, consumer advocates are calling for a look across the Rhine.

In the debate about compulsory nationwide insurance against flooding and other natural hazards, consumer advocates from the southwest are calling for the French model to be used as a guide. “98 percent of French households are insured,” said Jakob Thevis, vice-chairman of the Center for European Consumer Protection (ZEV) in Kehl, Baden-Württemberg.

Every household in the neighboring country pays an average of 26 euros a year to insure their house, household goods and car against natural hazards. That is cheap, said Thevis. However, the premium will rise to an average of 40 euros next year, announced the CEO of the state reinsurer Caisse Centrale de Réassurance (CCR), Édouard Vieillefond. One of the reasons for this is higher expenses as a result of natural disasters. The CCR is a central component of the French system.

Combination of private insurance and state system

The combination of private insurance and a state-controlled reinsurance system has been working in the neighboring country for over 40 years, said Thevis. The French state has only stepped in once so far, with 263 million euros. The ZEV advises people in the Upper Rhine border region and is supported by public institutions from Germany and France.

Only around half of private buildings in Germany are insured against natural hazards. The states are pushing for compulsory insurance, but the federal government is rejecting this. “The compulsory insurance demanded by the states would make living in Germany more expensive, entail a great deal of bureaucracy and would not relieve the state of financial liability,” said the Federal Minister of Justice Marco Buschmann (FDP), who is responsible for the issue.

“We have 97 to 98 percent coverage for home insurance,” said CCR boss Vieillefond, referring to his country. This is the basis for having the mandatory supplement to cover against natural hazards.

Uniform contribution rate thanks to the solidarity principle

In France, the term natural disaster includes floods, mudslides, ground movements, tidal waves and particularly violent storms. Lightning and hail are not included. The CCR boss made it clear that due to the principle of solidarity, there is a uniform contribution rate – currently it is twelve percent of the total insurance premium. “Everyone pays the same rate – whether in Guadeloupe, Bordeaux or Paris.”

According to the German insurance industry, the system à la française is not a blueprint for Germany. “The system is in deficit, the system is not stable,” said the deputy general manager of the industry association GDV, Anja Käfer-Rohrbach, at the beginning of the month.

SPD legal politician Johannes Fechner, on the other hand, defended the model of the large EU partner at a conference last week: “In France you can see that severe weather events and the damage that they threaten can be insured cheaply. We don’t have to reinvent the wheel in Germany,” said the Bundestag member. He had previously spoken out in favor of stronger insurance protection against the consequences of storms.

Source: Stern

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