FDP and the Ministry of Justice are against compulsory flood insurance.
The government, made up of the SPD, Greens, and FDP, doesn't seem likely to instate a compulsory insurance against damage caused by floods and heavy rains. A spokesperson mentioned that Chancellor Olaf Scholz would address the matter during a meeting with state leaders on June 20th.
While no formal announcement was made, a spokeswoman from the FDP-led Federal Ministry of Justice and FDP General Secretary Bijan Djir-Sarai made it known that there's substantial opposition to this mandatory insurance. With these reservations in place, the likelihood of federal legislation on this subject during the present term is practically nonexistent. The Justice Ministry spokeswoman emphasized that each of the 16 federal states may choose their own regulations concerning a mandatory insurance.
The argument over a mandatory insurance for protection against flood damage, among other things, has persisted for quite some time. There was no decision on this issue whilst the Union and SPD were in coalition until 2021. The CDU/CSU parliamentary group is set to file another motion today on the matter. "I don't see a legal obligation," stated the FDP General Secretary in Berlin. "Ownership is already quite costly for many residents in Germany. Ownership would then be even more expensive." A government spokesperson alluded to the necessity for the Bund-Länder working group to consider the expansion of basic damage insurance. A compulsory insurance is one possibility.
The insurance sector and the Federal Ministry of Justice are raising concerns regarding a compulsory insurance, due to the substantial rise in expenses for building insurance for most homeowners. In the case of a mandatory insurance, the risks and costs would be transferred to all insured parties, leading to increased insurance costs for homeowners in high-risk areas like flood plains or being denied coverage altogether.
The GDV, an insurance industry association, reported that just 54% of residential buildings in Germany are covered against natural disasters, such as floods. In places like Saarland and now Baden-Württemberg and Bavaria that have been affected by these floods, there's an increasing clamor for the state to support homeowners with damaged but uninsured houses. The Union, therefore, is advocating for a regulation that would allow homeowners to opt-out of natural disaster insurance at the start of a new policy. If they reject the option, they wouldn't be eligible for any assistance from the state.
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The FDP within the Federal Ministry of Justice, led by Bijan Djir-Sarai, continues to express significant opposition to the proposal for a compulsory flood insurance. Despite the CDU/CSU parliamentary group advocating for it, the FDP General Secretary maintains that homeowners should not face further financial burden with a mandatory insurance, as property ownership is already costly in Germany.
In light of the Ministry of Justice's stance against compulsory flood insurance, the homeowners may rely on individual regulations set by the 16 federal states to address insurance coverage for flood-prone areas, rather than a uniform nationwide policy.
