Federal Chancellor Olaf Scholz is calling for homeowners to be insured against flood damage, for example.

"We are making progress in terms of natural hazard insurance," said Scholz in a government statement in the Bundestag on Thursday. This will be an important topic at his meeting with the prime ministers on June 20. "Owners of houses and apartments must be able to insure themselves against damage caused by natural forces," emphasized the Chancellor.

Last week, the FDP-led Federal Ministry of Justice and FDP Secretary General Bijan Djir-Sarai expressed clear reservations about compulsory insurance against damage caused by natural forces. The spokeswoman for the Ministry of Justice pointed out that the 16 federal states could each decide on individual regulations for compulsory insurance. A government spokesperson had said that the federal-state working group should examine how natural hazard insurance could be expanded. Compulsory insurance is one of the options.

The dispute over compulsory insurance for building damage caused by floods, for example, has been simmering for years. The insurance industry warns against compulsory insurance because it would significantly increase the cost of building insurance for most homeowners. This is because with compulsory insurance, insurers would pass on the risk and costs to all policyholders. Up to now, it has either been very expensive for homeowners in high-risk regions to take out such insurance or insurance companies have refused to do so. The state, in turn, wants to avoid having to pay for damage to uninsured houses.

(Report by Andreas Rinke and Alexander Ratz; edited by Ralf Bode. If you have any queries, please contact our editorial team at berlin.newsroom@thomsonreuters.com)