RH for New Insurance Model Against Extreme Weather Damage

In Austria, flood risk is the biggest challenge of the climate crisis, according to the OECD. The Court of Audit examined the years 2019 to 2023, particularly in Carinthia and Tyrol, which were heavily affected by torrent and avalanche events. Tyrol recorded damages of 315.46 million euros, 1.6 times more than Carinthia with 194.46 million euros. Three major flood events in 2002, 2005, and 2013 led to severe damages.

Court of Audit Refers to Insurance Model Against Extreme Weather Damage in France and Switzerland

Households and companies receive aid from the states for damages from extreme weather events, which in turn are reimbursed 60 percent of the sum from the disaster fund by the federal government. The Court of Audit pointed out that different rules apply to the payouts. For example, from 2015 to 2023, the aid from the state of Carinthia covered an average of 31 percent of damages to private assets, while in Tyrol it was twice as much at an average of 63 percent. The Court of Audit therefore recommended the development of an insurance model for better coverage of private elemental damages.

Although private households and companies can insure themselves with elemental damage insurance, according to an estimate from 2022, this was only about five percent of the values in the case of flood damage. Generally, the insurance sum for flood damage was capped at 10,000 euros, and in flood risk areas, taking out insurance was partially excluded. According to the report, this indicates a low risk awareness among the population, but also limited options for insurance coverage against flooding. In France and Switzerland, however, there is a mandatory insurance against flood damage. The Court of Audit recommended that the Ministry of Finance, together with the states, raise awareness among the population about the only partially covered damages and pointed out the advantages of mandatory insurance.

Finally, the Court of Audit pointed out that hazard zone plans of torrent and avalanche control do depict risks, but do not mean a construction ban in particularly endangered zones. "For red hazard zones, an explicit ban on new constructions should be considered, for yellow hazard zones, further building restrictions should be aimed for," recommends the Court of Audit.

(APA/Red)

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