In the debate on flood damage, Federal Minister of Justice Marco Buschmann is proposing an obligation for insurers to offer all homeowners natural hazard insurance.

It is important to give all property owners the opportunity to insure themselves against such natural hazards, said a spokesperson for the ministry in Berlin on Friday. "We want to ensure this with an obligation to offer insurance." For new buildings, insurers must also provide the owner with an offer for protection against natural hazards such as flooding, earthquakes or snow pressure when taking out homeowners' insurance. For existing homes, owners should at least be informed about the possibility of such protection. This should apply instead of making insurance compulsory for homeowners, which is already being discussed.

The ministry spokesperson said that this could lead to a higher insurance rate. So far, only just over half of all houses are insured not only against storm and hail, but also against other natural hazards. Buschmann has always spoken out against compulsory insurance. The insurance industry has brought up an "opt-out" solution, whereby homeowners would have to actively object to extended but more expensive cover. However, they are calling for a legal basis for this.

Just under one percent of all houses - for example those directly on rivers that often rise above the banks - are considered uninsurable. Chancellor Olaf Scholz emphasized on Thursday that the traffic light government is making progress with the natural hazard insurance that has been under discussion for years. "Owners of houses and apartments must be able to insure themselves against damage caused by natural forces," he emphasized. This will be an important topic at his meeting with the state premiers on June 20. The state wants to avoid having to repeatedly step in financially for uninsured houses in the event of an increasing number of floods.

The Ministry of Justice pointed out that compulsory insurance would also cost the state money. It is "hardly conceivable without the state standing ready in the background to cover major claims", said the spokesperson. With state reinsurance, the premiums for endangered buildings could be kept within limits without everyone having to pay.

(Report by Andreas Rinke; with the assistance of Alexander Hübner; edited by Jörn Poltz. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com)