Justice Minister Buschmann against compulsory insurance for elemental damages: Focus on voluntary offers

Federal Justice Minister Marco Buschmann opposes mandatory insurance for natural hazards and instead advocates for insurers to be required to offer it. The FDP politician emphasized in Berlin on Wednesday that it is positive when people choose to insure buildings against floods and other natural hazards. However, everyone should have the opportunity to receive an offer. For existing contracts, he proposes offering the option to increase coverage. For new contracts, the option for natural hazard insurance should be included but can be opted out of. According to Buschmann, this solution could quickly increase the coverage rate. Buschmann categorically rejects an obligation for property owners. He argues that mandatory insurance could mean some people might have to give up their parental home due to high premiums. Additionally, renters could face significantly higher ancillary costs due to mandatory natural hazard insurance. Buschmann also disagrees with the notion that mandatory insurance would lower premiums for everyone. He clarified that the premium amount depends on the specific local risk. Last week, the Bundesrat increased pressure on the federal government by highlighting the urgency of nationwide mandatory insurance for natural hazards. In light of recent extreme weather events and major damage incidents, the Bundesrat argued that such mandatory insurance is necessary to financially protect the affected parties and relieve taxpayers. The issue is on the agenda for tomorrow’s meeting between the state premiers and Chancellor Olaf Scholz. Currently, only about half of the homes nationwide are insured against flood damage, heavy rain, landslides, or snow pressure. The states had already asked the federal government over a year ago to propose legislation for introducing mandatory insurance.