Natural disasters are now striking in places where you least expect them. The people who were recently affected by flooding in southern Germany can confirm this. Even homeowners in apparently safe areas are now thinking about digging drainage pits in their gardens so that any heavy rain doesn’t flood their cellars. And how can you insure yourself against such events?
Natural hazard insurance
Recommended articles
This covers costs that arise from extreme weather conditions on buildings. This includes: flooding, heavy rain, inundation, sewer back-up, excessive snow loads on roofs, avalanches, landslides, subsidence and earthquakes, and volcanic eruptions. The consequences of such extreme weather are mostly not included in normal building insurance, which almost all property owners have. Residential building policies usually only cover damage caused by broken water pipes, storms and hail. Everything else must be insured separately and the corresponding module added to the contract. The Association of Insurance Companies (GDV) explains that even this does not cover costs caused by rising groundwater. If water pushes into the basement from below, this is considered a construction defect for which the respective property owners themselves are responsible.
Won’t compulsory insurance come soon?
Because the damage caused by extreme weather is increasing, the costs for the state are also rising, but so far only about half of homeowners have taken out a natural hazards policy, the political debate is ongoing about so-called compulsory insurance. If it existed, all homeowners would have to take out such a contract. The state governments, among others, are in favor of this, but at the instigation of the FDP, the federal government has so far only supported the obligation for insurers to offer such policies to homeowners.
It seems unclear whether this discussion will soon lead to a result. Therefore, there is a lot to be said for looking for a solution individually. The Finanztest magazine of the non-profit Stiftung Warentest, for example, writes: “We recommend insurance against natural hazards.”
For whom does a contract make sense?
Recommended articles
“Heavy rain can affect any region in Germany,” says a spokeswoman for the GDV. The Association of Insurance Companies provides a so-called flood check on its website, where you can check the risk level for any German postcode. The result is often “medium risk”. Anyone who wants to can see this as a tactic by insurance companies to sell new contracts to many customers, although the message from the association spokeswoman is certainly correct: Heavy rain can now quickly cause huge amounts of water to accumulate in seemingly risk-free places, threatening the building’s technology in the basement – even in urban districts far from rivers and peaceful villages on gentle hillsides.
Where and how do you get the policies?
It is advisable to search on the well-known consumer information and price comparison portals. These offer simple input functions that present a selection of contract offers after a few minutes and entering some data about the respective property. A second route leads to insurance agencies, which also provide a comparison of various contracts if possible. Finally, property owners can also choose the obvious solution and add the natural hazard module to the company with which they have already taken out residential building insurance. Apart from that, it may be worth taking a look at the magazine Finanztest, which published a comprehensive comparison of relevant contracts in April 2023.
The costs
For an old building with eleven condominiums in the city center – not near a river, medium risk of heavy rain – a good and inexpensive building insurance policy can cost, for example, 3,300 euros per year (300 euros per apartment). Plus the elemental damage module, the price is a good 4,000 euros (around 360 euros per apartment). The additional cost for insurance against elemental damage is therefore 60 euros per year and apartment, which amounts to five euros per month. For a single-family home (200 square meters of living space, near a lake, high risk of heavy rain), a cheap price can mean 1,054 euros (basic) and 1,400 euros (with elemental damage) annually. These values are indicative – depending on the risk, house, equipment and geography, they can be significantly higher. Prices are also rising noticeably. This reflects the increasing damage and the increased construction costs.
The benefit
Good contracts contain the wording that the property in question is insured at the “sliding replacement value”. This means that the insurance company will take over the restoration of the house at current prices and standards. This means that even old buildings are brought up to date during the renovation.
And what about home contents insurance?
You can also upgrade these. Residential building and natural hazard insurance policies only cover the house, not the movable inventory. For this, you can take out home contents insurance with an additional extreme weather module. If you live on the tenth floor in the city center, this may be less important, although even there the old furniture in the basement can fall victim to flooding.
Is further precaution necessary?
The insurance pays for the damage. Of course, it would be better if it didn’t happen in the first place. Property owners should therefore think about the structural protection of their houses in good time. This applies, for example, to the design of the garden. The slope of the outdoor facilities should not lead towards the building, but away from it. This means that rainwater does not run towards the house, but in the opposite direction. Infiltration troughs or pits on the property can ensure that sudden masses of water are collected. It also seems advisable to close off unused openings near the ground and to install watertight and pressure-tight windows and doors on the ground floor and basement.
