The FDP opposes mandatory flood insurance; the Federal Government remains non-committal.
Natural disaster liability insurance has been a contentious issue for a long time now. Until now, insurance coverage for damages due to natural disasters has been optional and usually quite costly, with some risk zones even not having access to it at all.
In November 2023, the federal government and the states formed a task force to look into increasing the availability of insurance for natural disasters. The task force is exploring various options, one of which is mandatory insurance. Vice-Government Spokesperson Wolfgang Büchner announced on Monday that the final report would be presented at the next federal-state conference on June 20.
The federal government has not yet decided on this issue, but the Free Democratic Party (FDP) has already spoken out against mandatory insurance.
FDP General Secretary Bijan Djir-Sarai said at a party meeting on Monday, "I don't see that obligation." He added that homeownership in Germany is already expensive and that making it mandatory would "make it even more expensive."
The FDP suggests focusing on strengthening voluntary measures instead. Djir-Sarai mentioned that the states could introduce an elemental damage insurance themselves. "If the federal states want to do that, they have the capability to do so."
A spokesperson for the FDP-led Federal Ministry of Justice also cautioned against mandatory insurance, saying that it would not solve the problem of building damage. Instead, "preventive measures are particularly necessary." Furthermore, a mandatory insurance would lead to "significant financial burdens for many households."
The Union party, however, supports the idea of a "general elemental damage insurance." Union politician Volker Ullrich said, "We demand that new residential building insurance only be offered with coverage for natural disasters. The state cannot replace every damage, and the taxpayer cannot pay for every individual damage." Ullrich believes an insurance is necessary to keep the premiums affordable for people living in high-risk flood areas.
The president of the German Association of Cities and Municipalities, Uwe Brandl (CSU), weighed in on the radio station "Phoenix" about voluntary versus mandatory insurance. He said, "If we trust individuals to take their own precautions without compulsion, without making it a requirement, then that's one option. If that doesn't work on a voluntary basis, maybe we should discuss whether it should be legally required."
The Consumer Center Federation (vzbv) supports discussing the issue but has reservations about mandatory insurance. vzbv Managing Director Ramona Pop told Handelsblatt, "A mandatory elemental damage insurance is a step before the first. The federal government should first legally define which risks must be covered by residential building insurance."
In terms of insurance protection, according to Pop, it should always include comprehensive coverage, including protection against floods, heavy rain, storm surges, rising groundwater, and moisture. To make insurance more affordable, people in high-risk areas should be able to significantly reduce their premiums by taking self-retention and preventive measures.
