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Mandatory Flood Insurance Agenda Gains Popular Support in Germany
A new survey indicates a large majority of Germans support the federal government's plan to implement mandatory insurance against floods and other natural disasters. The initiative, proposed by the Union and SPD, has garnered significant backing from both homeowners and tenants, according to a representative survey conducted by Verivox.
Market research institute Innofact surveyed a total of 1,052 homeowners and 1,002 tenants aged 18 to 79 in mid-May 2025. The findings showed that 78 percent of homeowners and 79 percent of tenants are in favor of the implementation of compulsory insurance against elemental damages.
Although most respondents were supportive, concerns have arisen regarding the cost of the mandatory insurance. Approximately 15.9 percent of homeowners surveyed expressed they could not afford any additional expenses, while another 28.5 percent did not wish to incur additional costs.
The government's proposal aims to address the exorbitant costs borne by federal and state governments due to floods. Such disasters are often followed by aid programs for affected individuals, putting a heavy strain on the public budget. These aid programs are costly, in part, because only about half of German residential buildings are insured against elemental damages.
Nonetheless, several questions remain unanswered in the coalition agreement. The agreement does not indicate whether all homeowners will be obligated to obtain elemental insurance or if there will be an opt-out option for reluctant participants. German insurers have advocated for an opt-out solution to prevent building virtually guarantee-flood areas from being insured, leading to high costs for insurers.
Large German insurance companies have generally softened their resistance to mandatory insurance, although they remain unconditionally committed to the issue. Jörg Asmussen, CEO of the German Insurance Association (GDV), expressed that the federal government's commitment to elemental protection is a crucial signal. However, Asmussen underlined the need for a comprehensive concept that encompasses stricter urban planning. This concept would include measures such as climate-resilient urban planning, targeted de-sealing of areas, a binding construction stop in high-risk areas, and a climate risk assessment for building permits.
Another point of contention is the construction ban in "high-risk areas." Building in floodplains is prohibited in Germany, but this ban is largely ineffective as exceptions in the Water Management Act allow construction in flood areas. According to an analysis by the GDV, more than 300,000 buildings in Germany are located in endangered zones, with 80 percent situated in provisionally or finally designated flood areas.
The German Association of Towns and Municipalities has encouraged municipalities to generally refrain from establishing new building areas in flood-prone regions. The opt-out solution is also considered reasonable by the municipal association. "This would leave the final decision with the insurance policyholder," said Bernd Dusterdiek, the deputy mayor for urban development and environmental protection.
A third matter of debate is who will bear the cost of elemental insurance - homeowners or tenants. Currently, owners may pass the cost of building insurance on to tenants, including elemental damages. However, the German Tenants' Association has already called for this to be removed from the operating cost regulation. The coalition agreement remains vague on this point.
The Homeowners' Association Haus+Grund opposes the introduction of mandatory insurance and the removal of elemental insurance from the list of chargeable operating costs. Inka-Marie Storm, the chief legal officer of the association, emphasized that prevention is more effective than insurance. Haus+Grund is advocating for a comprehensive prevention package against flooding instead of a mandatory insurance policy. This would encompass measures such as refraining from new building areas in known danger zones and improving technical flood protection through dam construction, river renaturation, and other measures.
It remains unknown when the coalition's plan will become law. The Federal Ministry of Justice is working diligently on its implementation, but no specific details have been disclosed due to the early stage of the process.
Keywords: Mandatory Insurance, Natural Disaster, Flooding, Federal Government, Flood, Coalition Agreement, SPD, Verivox, GDV, Jörg Asmussen, Heidelberg, Munich, Germany, Elemental Damage.
- The German insurance industry supports the mandatory insurance plan, emphasizing the need for stricter environmental-science measures such as climate-resilient urban planning and a climate risk assessment for building permits to prevent flood-prone areas from being developed.
- The coalition agreement remains unclear about who will bear the cost of elemental insurance; German insurers advocate for an opt-out solution to prevent high-risk areas from being insured, while the German Tenants' Association propaganda for removing elemental insurance from the operating cost regulation.
- The proposed mandatory insurance aims to address climate-change issues arising from natural disasters, with the German government committing to elemental protection through measures like targeted de-sealing of areas and a binding construction stop in high-risk areas. Nonetheless, the agreement does not specify whether all homeowners will be obligated to obtain elemental insurance or if there will be an opt-out option for reluctant participants.
