After severe earthquakes, all homeowners are required to contribute to covering the damage. This is met with resistance.
According to the federal government, 15 percent of buildings in Switzerland are insured against earthquakes. Too few for the Federal Council. Because a major earthquake would affect many more buildings. That is why the Federal Council wants to make building owners responsible: as it announced at the end of 2023. In the future, homeowners will have to make a solidarity contribution after a particularly severe earthquake – regardless of whether their building is affected or not.
Specifically, homeowners are to pay 0.7 percent of the building insurance sum after a severe earthquake. In such a case, building damage could amount to tens of billions, the federal government explained after the consultation process ended. The current solution would distribute the costs among all homeowners.
HEV Director Meier relies on personal responsibility
The Homeowners Association (HEV) is fighting against this plan. They have always opposed making it mandatory, explains director Markus Meier: “There is already a so-called insurance pool for earthquake damage within building insurance. Private insurance companies have enough offers where you can insure this yourself and in the spirit of free competition. There is no need for a mandatory requirement here.”
Caption: The federal government wants to ensure that homeowners affected by a severe earthquake are compensated as quickly as possible. (Pictured: Employees of the Swiss Seismological Service (SED) in Zurich, 14.01.21) KEYSTONE/Christian Beutler
Meier also doubts that, as the federal government claims, only a small minority are actually insured against earthquake damage. “I have the feeling that there is also a certain number of unreported cases that are not recorded – in fact, wherever mortgages are provided through financing institutions.” This would give these institutions a competitive advantage when granting mortgages.
If we allow the free market and personal responsibility to play their role, then we are on the right track.
A regulation such as the one at hand does not belong at the federal level either, because building insurance is the responsibility of the cantons. Meier is convinced that investors can decide for themselves how they want to protect their investment. “Those who do not do this will ultimately bear the loss.”
A requirement or the free market?
Building insurance is mandatory in many cantons anyway, explains Meier – and repeating the requirement in the specific area of earthquakes has been the subject of political discussion several times, but has never been passed. “And it will fail this time too,” predicts the HEV director.
The Federal Council itself describes the current solution as innovative. There would be no premium costs and payments would only be made in the event of a severe earthquake, it writes.
The cantons should remain in the lead
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According to the Federal Council, after a severe earthquake in Switzerland, homeowners should contribute to the damages by a maximum of 0.7 percent of the building insurance sum. After the consultation process with the cantons has ended, the federal government now wants to draw up a message on this matter by the end of 2024. “The proposal, which was welcomed by the majority, stipulates that property owners should contribute to the costs of covering building damage in the event of an earthquake,” writes the state government.
However, the Federal Council will not be given any new authority for this purpose: this is what several cantons would have wanted. It is assumed that the cantons will “assume their responsibility,” the Federal Council writes in its statement. Markus Meier from the HEV therefore doubts that it will become mandatory: “I assume that building insurance will be in particular demand.”
But Markus Meier is not convinced. Under the current plan, contributions would have to be paid in solidarity by all homeowners, not just in the area where damage occurred. “Imagine that the whole thing is still linked to an entry in the land register, so it is still secured by a mortgage. We cannot allow it to get that far. It is an unsuitable concept.”
So what does the HEV want? They are sticking to the position that it is the responsibility of the individual owners, explains Meier. “If we let the free market play its role, if we let personal responsibility play its role, then we are on the right track.”
