Mandatory disaster insurance: sector predicts greater financial losses
Mandatory insurance for natural disaster protection is under scrutiny due to the concern that less prevention efforts would be taken if damages are insured. GDV-CEO Rollinger voiced this concern to the "Augsburger Allgemeine". Individuals should have the freedom to secure their properties however they see fit, Rollinger added. "It's each person's responsibility to maintain their property."
The topic of compulsory insurance against natural disasters has been a hot button issue for quite some time. The flood disaster in Bavaria and Baden-Württemberg in June has fueled this debate once again. Opinions are divided.
The federal states have proposed that the federal government comes up with a quick solution on this matter, as per a Bundesrat resolution. A mandatory insurance is also supported by many parts of the traffic light coalition. However, the FDP is against it. Federal Justice Minister Marco Buschmann (FDP) reaffirmed his stance against a mandatory insurance on Wednesday and instead suggested a proposal requirement.
Rollinger advocated for a prevention plan instead. "If prevention doesn't work, insurance premiums will keep rising, which won't benefit our customers in the long run," Rollinger told the "Augsburger Allgemeine". "We'd either need to buy a lot of insurance coverage for extreme weather events or hoard a lot of capital for it." Financing this will become increasingly challenging.
Thuringia's Minister-President Bodo Ramelow (Left) urged the Bund to create a legal framework for a compulsory insurance for natural disasters such as floods before the conference with the states. "If natural damage is insured by law, people won’t have to worry about being suddenly bankrupt after a disaster," Ramelow told the "General-Anzeiger" and the "Rheinische Post". This would then be shared among many people like car insurance.
Read also:
- The GDV-CEO Rollinger expressed concern that less prevention efforts might be taken if damages are insured through mandatory insurance for natural disaster protection.
- The flood disaster in Bavaria and Baden-Württemberg in June has reignited the debate about compulsory insurance against natural disasters.
- The federal states have suggested that the federal government should propose a solution for compulsory insurance against natural disasters due to the Bundesrat resolution.
- The FDP is against the idea of a mandatory insurance, with Federal Justice Minister Marco Buschmann reiterating this stance on Wednesday.
- Rollinger proposed a prevention plan instead of mandatory insurance, stating that high insurance premiums or capital hoarding for extreme weather events could become financially challenging.
- Thuringia's Minister-President Bodo Ramelow urged the Bund to establish a legal framework for compulsory insurance against natural disasters like floods.
- Compulsory insurance for natural hazards is a topic of interest in the German insurance industry, particularly for companies that provide coverage against natural disasters.
