Driving Through Stormy Seasons: 1.3 Billion Euros in Vehicle Damages from 2024 Extreme Weather Events
Storm-related auto insurance losses reach a staggering 1.3 billion euros in 2024 - Massive Car Insurance Claims: Storm of 2024 Incurs EUR 1.3 Billion in Damages to Vehicles
Mother Nature pulled no punches in 2024, especially in Bavaria, Baden-Württemberg, and Thuringia, leaving a trail of vehicle destruction in her wake. With damages averaging over 4,000 euros per car, the trio of German regions accounted for a significant chunk of the 1.3 billion euros in insurance claims, the GDV revealed.
Comparatively, 2023 saw a whopping 1.9 billion euros in damages to 480,000 cars. But with climate change turning up the heat on natural hazards, it seems we might be in for a bumpy ride.
GDV CEO Jörg Asmussen stated that although the damages in 2024 were in line with the long-term average, climate change has cranked up the threat from extreme weather events. "Climate change has made natural hazards more unpredictable and brutal," Asmussen warned. "We've seen individual storm cells and hailstorms becoming more intense. A handful of extreme weather events can cause massive destruction in a blink of an eye."
Comprehensive insurance can offer some shelter from the storm, covering damages from storms, hail, lightning, or flooding. But those relying solely on liability insurance for their vehicles could find themselves feeling the full force of the disaster. They'd be footing the repair bill post-storm, the GDV cautioned.
A Rising Tide of Rain and Risk
Heavy rainfall and flooding have become more frequent and intense in Germany, particularly in our focal regions. In 2024 alone, these events cost insurers around €2.6 billion, you guessed it - above the long-term average. Southern Germany has taken a pounding, making it top billing for flooding-related insurance claims.
Winds of Change
Along with heavy rainfall, severe wind events are on the rise, taking a toll on vehicles in the south. These wind-related hazards add yet another wrinkle to the risk profile for insurers covering vehicles in southern Germany.
A Blaze of Glory...or Not
Even regions like Thuringia, once spared the wrath of wildfires, are starting to feel the heat. Drought conditions have taken hold, and with them, the threat of wildfires. Such fires pose a new and significant risk to both the natural environment and insurance liabilities.
Economic Implications
The recent years of extreme weather events have left no stone unturned, with EU economic damages totalling €738 billion between 1980 and 2023. The past decade seeming to bear the brunt of the burden.
Adapting to the New Normal
In light of these developments, the German insurance industry is sounding the alarm for proactive measures to combat the risks. As the losses from climate-related natural hazards continue to climb, risk management strategies are needed that blend prevention with insurance solutions.
Proposed measures include mandatory insurance for residential buildings and possibly extended coverage for climate-related damages. Acknowledging that stronger insurance coverage and climate risk adaptation are key to managing losses as climate change marches on.
EC countries should reevaluate and adapt their employment policies to address the increasing risk of climate-change-induced extreme weather events and the resulting vehicle damages. This would also involve empowering the scientific community to further study environmental-science aspects of climate change and its impacts on property and infrastructure damage. Apart from this, fiscal policies need to be revised to accommodate increased insurance premiums in order to manage the financial burdens of climate-related disasters more effectively.
