Many Germans still underinsured against floods, insurance industry warns

German homeowners remain underinsured against extreme weather events like floods, which are ever more likely as a result of climate change. Two years after devastating summer floods killed more than 180 people in western Germany, insurers’ association GDV warned that only 52 per cent of houses in the country are covered by a natural hazards’ insurance. The lobby group called the coverage “existentially important” because it compensates for damages caused by heavy rain and floods. "Unfortunately, after a temporary significant increase immediately after the floods, interest has dropped again sharply" in this type of insurance, said GDV head Jörg Asmussen. Horst Nussbaumer, a manager at insurer Zurich, said people were quick to forget extreme weather events, a phenomenon he called "flood dementia," according to a report in business daily Handelsblatt.

The summer floods in 2021 were the most serious natural disaster in Germany for the insurance industry, which has paid out 6.7 billion of the 8.4 billion euros in total damage for property insurance. The government also spent billions on support payments, thus compensating for the fact that many of those affected were not insured. "The state is one of the largest insurers of natural hazards, except that it does not receive any premiums from its customers," said Jan-Oliver Thofern, manager at insurance broker Aon Deutschland. Several German states have called for compulsory natural hazard insurance, but GDV said the proposal went too far and would not work without concrete and binding preventive measures. The industry warned that Germany must do more to prevent floods and adapt to climate change more generally. "Otherwise, according to our estimates, premiums for residential building insurance could double within the next ten years as a result of climate damage alone," GDV said.