Compulsory natural hazards insurance for owners has been under discussion for many years. The debate intensifies, particularly after major loss events. The Bundesrat is currently calling for compulsory insurance, while the Federal Government has so far rejected presenting a corresponding draft.
Survey of owners
The Wohnen im Eigentum (WiE) consumer protection association has now conducted a nationwide survey of property owners’ views. Their perspective has received hardly any attention in the political debate to date. Almost two thirds of the owners surveyed support compulsory natural hazards insurance. Without it, condominium owners find it difficult to insure their property.
Natural hazard damage is damage to buildings caused by natural events, known as natural hazards. Apart from storm and hail damage, these risks are not automatically covered by buildings insurance, but require additional natural hazards insurance. Wohnen im Eigentum (WiE) conducted an online survey of private property owners on natural hazards insurance. A total of 2,509 property owners took part, including 546 owners of detached houses or blocks of flats and 1,963 condominium owners representing WEGs with at least 73,336 residential units.
Inadequate cover for condominiums – compulsory insurance could help
The survey shows that a majority of owners of detached houses and blocks of flats, around 60 per cent, have insurance against natural hazard damage, while only around 40 per cent of condominium owners say that they are covered. It also shows that the larger the condominium owners’ association, the lower the rate of insurance.
The greatest obstacle to taking out insurance is the majority resolution required in a WEG. This highlights the systemic disadvantages faced by condominium owners. “An individual condominium owner cannot insure the building against natural hazards if the majority of the association refuses,” says WiE board member Dr Sandra von Möller. “Introducing compulsory insurance, which we advocate as an association, would help here.” With this position, WiE reinforces the views of the property owners who took part in the survey: almost two thirds support the introduction of compulsory natural hazards insurance.