Customers reconsidering purchases amid economic uncertainty. - Officials Advocate for Mandatory Natural Disaster Coverage
Facing repeated flood disasters, including in southern Germany, the nations are urging for the timely implementation of mandatory insurance against natural calamities. Recently, a decision was made on this matter at a Consumer Protection Ministers' conference in Regensburg by the Federal Ministry for the Environment. Apart from the Bundesrat, the Consumer Protection Ministers were also involved. The federal government needs to create a risk-based system but ensure it doesn't overburden individual insurance policyholders tremendously. Legislative procedures should also be expedited quickly - aiming for completion during this legislative session, by autumn 2025 at the latest.
"The aftermath of the current flood disaster demonstrates that it's high time for a nationwide natural disaster insurance," stated the current chair of the Consumer Protection Ministers' Conference, Bavaria's Minister Thorsten Glauber (Free Voters). Financial losses from floods cannot be solely handled by those affected. The government must act swiftly and establish a legislative framework.
The countries appealed to the federal government through the Bundesrat more than a year ago to submit a proposal for a federal law on compulsory insurance. A working group formed since to handle this matter is now anticipated to present its findings before the next meeting of the Prime Ministers and Minister Presidents with Federal Chancellor Olaf Scholz (SPD) on June 20. Here, the subject will be discussed. Within the traffic light coalition, the idea of a compulsory insurance for natural disasters is contentious.
The Consumer Protection Ministers stress in their resolution: "The introduction of a nationwide mandatory insurance, based on the solidarity principle, is long overdue." To limit the financial burden for those affected, appropriate and proportional contribution scaling is required according to the risk, without inducing undue financial strain on the individual policyholder.
Informally, I would summarize their statement as: We can't keep ignoring flood catastrophes and ignoring the need for natural disaster insurance. It's about time we establish a nationwide scheme. Let's find a balance between considering the risks and not burdening people too much financially. Quick action is needed from the feds on this legislative front.
