Insurance rates on property to grow in wake of floods
Most Czechs are still coming to terms with the havoc that this year's floods wrought on their family finances. But the real cost of the floods is way beyond the assessed damage. Czech insurance companies have announced that in the wake of this year's devastating floods they plan to increase insurance rates on property by 15 to 30 % .
" In recent years the Czech Republic was affected not only by floods but also by a number of other calamities like windstorms or hailstorms. The losses were covered by insurance -to the tune of billions of crowns - and a big part of the insured losses was covered by re-insurance, which resulted in heavy financial losses for re-insurance companies dealing with our territory. Negotiations about new re-insurance rates started in September. The negotiations have not yet been concluded but re-insurance companies have made it clear that the rise of their rates will be significant."
It has come to light that in covering the cost of these floods Czech insurance companies will pay more than German and Austrian insurance companies together, because allegedly German and Austrian companies pick their clients more carefully. Does this mean that your policy will change in future as well? Does it mean that some homes will be literally uninsurable?
Well, what can these people do? They probably won't be able to sell their home. Is there anything at all that they can do in terms of safeguarding their property or is it just a risk they've taken in buying a house close to the river?
"This is not a question you should be putting to insurance companies. That is a question for the state. You must ask the state what it can offer these people because insurance companies are not institutions which could solve this problem."
So in the future these people will be dependent on state emergency aid in the event of a flood?
"Yes, we think so, but again, that is for the state to say."
Will this price increase not significantly lower the number of your clients?
"We do not expect any significant change in demand for insurance. On the contrary there is a chance that people will be more careful and insurance demand will grow because people will want to look after their property better. Today many people are uninsured and we think that after the big floods people will change their minds about this and ensure their property. "