Location in the floodplain – here the city of Bad Neuenahr after the devastating flood disaster triggered by heavy rainfall and the flooding of the Ahr.
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(Foto: action press)
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For many, looking into the past seems like the solution to a big problem at the moment. Up until 1994 there was an obligation for homeowners in Baden-Württemberg to insure themselves not only against damage caused by fire, tap water, storms and hail, but also against floods, floods and heavy rain. Because many homeowners did not cancel their so-called elementary insurance afterwards, 94 percent of the houses between the Odenwald and the Black Forest are still insured against flood disasters.
In the rest of Germany it looks different. The quota of buildings insured against natural hazards is less than 50 percent – although the storms have been increasing for years. In the federal states that are currently particularly affected, it looks like this: North Rhine-Westphalia has 47 percent, in Bavaria it is 38 percent, in Rhineland-Palatinate 37 percent.
The idea of making general protection against severe storm damage compulsory would still be wrong. At that time, the premium for every homeowner in Baden-Württemberg was almost the same, the individual risk was irrelevant. In this way, undesirable developments such as new development areas near flood-prone areas were even indirectly supported. The beautiful location counted, the increased risk associated with it was paid for by the general public.
If elementary insurance were to become compulsory again, this would also affect homeowners with an extremely low risk of flooding. You can easily identify who is one of them in the so-called zoning system for flooding, backwater and heavy rain, or ZÜRS for short.
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This geographic information system for natural hazards, which was introduced in 2001, shows that, according to the current data situation, over 92 percent of the addresses in Germany would not be affected by a flood in larger bodies of water. On the other hand, only 0.4 percent of the addresses are in the highest of four risk levels and have to reckon with flooding once every ten years. Even one level lower, only 1.1 percent of the addresses are affected; you have to reckon with flooding in the building every ten to one hundred years.
Risk levels are crucial
The development in heavy rain is somewhat different. At the moment, more than eleven percent of the addresses are at the highest risk level. Your building is in the valley or near a stream. Two thirds of the buildings in Germany, on the other hand, are on one level or in the middle of the slope. Forcing their owners to take out natural hazard insurance when the risk is limited would be the wrong approach. Even if they only incur a manageable 50 to 100 euros in additional costs compared to the previous protection.
After the bad pictures of the past few days, the most important thing is the buildings that are at the highest risk level. This risk is known to both owners and insurers.
The insurance premiums have risen enormously there recently. This trend will continue. The first thing that these homeowners need is assistance with the premiums. They are already faced with the problem that they can no longer afford insurance or that they only receive very limited protection.
Capping the premiums would be a viable option, but a government fund solution could be in the background – especially for this particularly vulnerable group. This is already being discussed in some places. It would be a reasonable approach.
A fund solution would be targeted
Even if such fund solutions are being quickly brought out at the moment, whether for pandemic, cybercrime or terrorism: A fund solution would in any case be more targeted than a legal obligation for all homeowners to join a community of solidarity against possible floods.
The incentives for those homeowners who are not yet insured against flood disasters like last week should, however, be pushed by the providers. New customers should be sensitized intensively on the part of the insurance distributors to the important additional module in the residential building insurance.
For existing customers, the files should be searched with the aim of making them attractive offers with a bundled overall protection. In addition, the proposal from the industry that homeowners can deduct their contributions from their taxable income in the future could provide an incentive for more protection.
These would all be the right starting points. In stark contrast to compulsory insurance for a product that the majority of homeowners previously did not want.
More: Insurance industry rejects compulsory insurance against natural hazards.
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