Coalition agreement
New obligation would cost homeowners hundreds of euros extra
01/19/2026 – 12:09 p.mReading time: 3 minutes
According to the coalition agreement, the black-red government would like to make elementary protection insurance compulsory. A new analysis shows what that costs.
The flood disaster in the Ahr Valley and a few years later the floods in Bavaria and Baden-Württemberg showed that extreme weather events are occurring more frequently in Germany due to climate change. This inevitably means that owners are more likely to report damage to their residential buildings due to extreme weather. According to the General Association of Insurers (GDV), 7.5 billion euros have been paid out to 200,000 insured people since the Ahrtal flood in 2021.
However, many of those affected did not have building insurance that covers natural hazards. The catastrophe resulted in financial ruin for them. In order to avoid such situations, the federal government wants to make natural hazard insurance compulsory: “We are introducing that in new business, residential building insurance will only be offered with natural hazard insurance, and in existing business all residential building insurance will be expanded to include natural hazard insurance on a specific date,” says the coalition agreement.
It is not clear whether this will also be implemented. For a long time it was difficult to give a general answer to the question of how much it would cost the owner. At the turn of the year 2024/2025, the money guide “Finanztip” compared offers for houses in 16 different locations and came to the conclusion: Extreme weather protection costs between 350 and 1,300 euros per year.
A new analysis by the specialist journal “Der Wirtschaftsdienst – Journal for Economic Policy” has now investigated in more detail. 1,094 addresses throughout Germany were queried across all risk classes. 39 insurance tariffs were compared, one with and one without elemental protection – resulting in a total of over 80,000 comparison values.
The result was that even in the lowest risk level, residential building insurance with elementary cover costs an average of 608.20 euros annually. In the highest risk classes – where the probability of an extreme event was considered to be particularly high – owners have to pay well over 2,000, sometimes even almost 3,000 euros (including 19 percent VAT). However, the authors found that in the highest risk classes it was often impossible to get insurance at all.
According to the analysis, the spread between the premiums was also quite large. A homeowner in a region with a low risk of flooding or earthquakes, but a moderate risk of heavy rain, can choose between 39 tariffs that range in price from 19 euros to 330 euros. The authors of the analysis suspect that this is because “there is very limited transparency about supply on the demand side for this market.” It can be assumed that most people do not actively inquire about natural hazard insurance and only “book” this component, if at all. The risk of an extreme weather event is often still underestimated in Germany.
