Homeowners prefer enforced insurance policies for covering basic damages.
Compulsory Elemental Damage Insurance Gains Momentum Among Homeowners
After years of deliberation, compulsory insurance for elemental damage has found its way into the coalition agreement, garnering broad support among homeowners. The proposed policy, according to a survey by Verivox, has 78% of homeowners and 79% of tenants deeming its introduction correct. On average, homeowners are willing to pay 286 euros annually for the policy, although affordability concerns persist for some.
The Verivox survey revealed that 61% of homeowners are concerned about an increase in natural disasters in their region, with 86% of these concerned individuals supporting the compulsory insurance policy. However, the financial implications of this move remain a concern for some homeowners, as 16% stated they could not afford additional costs for their residential properties, and 29% were unwilling to bear any further costs. Among those without elemental damage insurance, one in five cited the cost as the primary reason for not obtaining such coverage.
The cost of protection depends on factors such as the value, size of the house, and the hazard zone where the building is situated. In high-risk areas, annual costs could reach thousands of euros. In France, where such compulsory insurance is already in place, the premium does not depend on the risk for the location, but on the value of the insured property. Only 20% of German homeowners support such a system, while 33% reject redistribution in principle. Thirty-eight percent advocate for a cost cap, although not for redistribution among all insured parties.
A majority of homeowners (79%) also support a building ban in areas particularly vulnerable to flooding, with 68% of tenants in agreement. The federal government plans to ensure that residential building insurance will only be offered with elemental damage coverage in the future and that all existing contracts will be supplemented with such protection by a specified date. The details must now be carefully examined, said Federal Minister of Justice Stefanie Hubig to the "Augsburger Allgemeine."
Before the implementation of mandatory insurance, it is crucial to consider an "opt-out" solution, allowing homeowners to waive insurance protection under certain conditions. According to the Verivox survey, 68% of homeowners prefer this option.
In mid-May, a survey by Market Research Institute Innofact on behalf of Verivox found that slightly more than 50% of all private households are insured against natural disasters such as floods. The demand for compulsory insurance has increased, especially after significant flood events. However, the insurance industry fears that mandatory coverage could lead to the neglect of flood protection efforts in Germany, as policies are often unavailable or excessively expensive in high-risk areas.
- Real Estate
- Apartment
- Tenant
- Landlord
- Rent
- Insurance
- Stiftung Warentest
- Finanztest
- Storm
- Flood
- Natural Disasters
- In light of the increasing concerns about natural disasters among tenants and landlords, there is growing interest in mandatory insurance for elemental damage, particularly for apartments, as a means to protect property value and ensure economic security.
- The real-estate business, including investors and financiers, are closely monitoring the discussions around mandatory insurance for natural disasters such as storms and floods, as changes in the insurance market may impact the attractiveness and profitability of property investments.
