Floods in Germany likely caused damages worth almost $6 billion to insurance industry

WION Web Team
Berlin, Germany Published: Jul 21, 2021, 08:14 PM(IST)

Germany floods Photograph:( AFP )

Story highlights

Only around 45 per cent of homeowners in Germany have insurance that covers flood damage, according to the GDV, triggering a discussion about the need for compulsory insurance

The damage caused by devastating floods in Germany last week is likely to cost the insurance industry up to five billion euros ($5.9 billion), the GDV insurance industry association said on Wednesday.

"We are currently expecting insured losses of four to five billion euros," Joerg Asmussen, chief executive of the GDV, said in a statement, calling the disaster "one of the most devastating storms in recent history".

Damage in the states of North Rhine-Westphalia and Rhineland-Palatinate is likely to exceed the 4.65 billion euros recorded after a deluge in August 2002, it said.

However, the real cost is likely to be much higher as less than half of Germans in the affected states are insured against heavy rain and floods, the association said.

Chancellor Angela Merkel had vowed on a visit to the badly hit medieval town of Bad Muenstereifel on Tuesday that Berlin would come through to help in the short and long term.

The estimate does not include losses from the southern German state of Bavaria and in Saxony in the east last weekend.

Only around 45 per cent of homeowners in Germany have insurance that covers flood damage, according to the GDV, triggering a discussion about the need for compulsory insurance.

More than 170 people died in last week's flooding, Germany's worst natural disaster in more than half a century, and thousands went missing.

For immediate relief, the federal government will initially provide up to 200 million euros ($235.5 million) in emergency aid, and Finance Minister Olaf Scholz said more funds can be made available if needed.

That will come on top of at least 250 million euros provided by the affected states to repair buildings and damaged local infrastructure and to help people in crisis situations.

The floods have dominated the political agenda before a national election in September and raised uncomfortable questions about why Europe's richest economy was caught flat-footed.

Two-thirds of Germans believe that federal and regional policymakers should have done more to protect communities from flooding, a survey by the INSA institute for German mass-circulation paper Bild showed on Wednesday.

Interior minister Horst Seehofer, who faced calls from opposition politicians to resign over the high death toll, said there would be no shortage of money for reconstruction.

"That is why people pay taxes, so that they can receive help in situations like this. Not everything can be insured," he told a news conference.

"As the time interval between heavy natural disasters gets shorter and shorter, one needs a debate about a protection scheme and how it could be designed," Seehofer said.

Economy Minister Peter Altmaier told Deutschlandfunk radio aid would include funds to help businesses such as restaurants or hair salons make up for lost revenue.

(With inputs from agencies)

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