Compulsory Elemental Damage Insurance Gains Widespread Support Among German Homeowners
Homeowners prefer mandatory insurance for covering basic property damage
In a survey by comparison portal Verivox, a substantial majority of homeowners in Germany support the introduction of compulsory insurance against elemental damage. The policy would protect both household effects and residential buildings, with homeowners willing to pay an average of 286 euros per year.
According to the survey, around 78 percent of homeowners and 79 percent of tenants consider the introduction of such a policy to be appropriate. The initiative is a result of years-long debate, recently resolved through the coalition agreement.
Concerns about an increase in natural disasters in their region have heightened support for the policy, particularly among the homeowners who hold such concerns (61 percent). In response, 86 percent of these homeowners express support for compulsory insurance.
However, the financial ramifications of the new policy are cause for consideration. While many homeowners express their willingness to bear the costs, 16 percent admit they cannot afford any additional residential property expenses. A quarter (29 percent) of surveyed homeowners are not willing to shoulder any further costs. Among those without existing elemental damage insurance, one in five indicates that affordability is the primary deterrent from signing up.
Annual costs would vary depending on property value, building size, and the danger zone's location, according to Verivox expert Aljoscha Ziller. In high-risk areas, the annual expenses could exceed thousands of euros. In France, where such a policy is compulsory, costs are assessed based on property value, not the risk zone. Only every fifth German homeowner supports this system, while a third firmly rejects redistribution to spread costs more evenly.
Despite the widespread support, a cost cap—not redistribution among all insured—is favored by 38 percent of homeowners. Similarly, a building ban in particularly flood-prone areas receives broad endorsement, with 79 percent of homeowners in favor.
The coalition agreement stipulates that residential building insurances, including elemental damage coverage, should only be offered in the future. All existing contracts will eventually be supplemented with this protection. The specifics of the policy's implementation are still under review by the government.
The survey was conducted by market research institute Innofact on behalf of Verivox, with results reflecting private homeowners between the ages of 18 and 79 who reside in their own properties. Additionally, 1002 tenants aged 18 to 79 participated in the survey, representing the general populace in terms of age, gender, and federal state.
According to the German Insurance Association (GDV), approximately 51 percent of all private households in Germany are currently insured against elemental damages, such as floods. There are recurring calls for compulsory insurance; however, the industry cautions that it could lead to disregard for flood protection efforts in Germany, with policies sometimes not even offered in high-risk areas or at exorbitant premiums.
Source: ntv.de, awi/AFP
- A significant majority of tenants in Germany, like homeowners, support the introduction of compulsory insurance against elemental damage, as found in a survey by Verivox.
- Many homeowners and tenants who reside in regions with concerns about natural disasters see the introduction of this insurance policy as appropriate.
- In the realm of environmental science, the increasing frequency of natural disasters is a key factor in the climate-change discussion, affecting the housing-market and personal-finance, particularly in terms of real-estate investing.
- The participation of landlords in the financing of compulsory elemental damage insurance is not overlooked; the survey results show that 16 percent of homeowners cannot afford any additional residential property expenses, indicating potential implications for rental costs.
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