When storms swept our country in February of this year with names like Corrie and Dudley, roof tiles exploded and trees fell, and the damages from the storm totaled 500 million euros. About as much as flooding in Limburg and North Brabant a year ago this week.
“You don’t hear about those storms anymore,” counselor Timo Brinkman of the Association of Insurers wrote in a blog post on VvV. “Because most damages are simply insured and dealt with through streamlined processes.”
While insurance companies seem to handle storm claims flexibly, dealing with the Limburg floods is very difficult. It is often difficult for victims to understand how their policy works. Not much damage is covered. Some insurance companies are lenient and reimburse everything, but many insurance companies do not.
collective money pot
That should change, according to the Association of Insurers. This proposes a new model for better and more visible flood damage insurance, the private and public insurance pool. This amounts to a collective sum of money as all insurance companies and the government together allocate a lot of money to be able to help victims immediately in the event of a subsequent flood.
Similar systems already exist in countries such as France and the United Kingdom. No more hassle about fine print in policies. Whether the water comes from the air, the North Sea or the Meuse: all victims can file a claim for damages.
It sounds nice, but to arrange such insurance against water damage for everyone, everyone will have to pay a premium. Also residents of Groningen or Drenthe, where the chance of flooding is much lower than anywhere else in the country. For this reason, the Dutch Consumer and Markets Authority (ACM) discontinued group water damage insurance in 2013, when the plan was already on the table. The ACM stated at the time that “compulsory insurance is facing consumers and businesses with an increase in the tax burden that does not meet their needs.”
Lots of natural excesses
But now insurance companies say, there’s a good chance we’ll have to deal with these kinds of natural excesses more often because of climate change. After that, Limburgers, and perhaps in the future also the residents of Brabant and Zeelanders, will again rely on financial aid from the government, just like the Limburgers who were affected by last year’s flood.
According to the association, the collective system, in which a central disaster management team takes care of the entire settlement of claims, is also more straightforward. The Limburg flood assessment showed that many victims had no idea where to go with questions about their compensation claim.
Separately, insurance companies cannot provide cover against forms of water damage. “If the sea, the Ijsselmeer or the Meuse (also called the primary defenses) were flooded, only a few multinationals and a club of very wealthy individuals would,” according to the Association of Insurers report, which notes that the Meuse did not leave their banks last year.
Flood damage is significant, so premiums are high. If few people want to insure themselves, the premiums become expensive. So, with the exception of Turien & Co, no insurance company in the Netherlands offers coverage against these floods, says insurance expert Michel Ypma of comparison site Independer.
But such a major flood can cause a lot of damage that insurance companies cannot cover without a guarantee from the government. “It doesn’t make sense then to pay premiums first for a commercial insurance company that’s also making a profit,” says Ira Hillslot, professor of safety management at Radboud University.
If smaller rivers such as the Jeol River (secondary defenses) overflow and cause damage, almost everyone with a home or home insurance policy will be insured. Unless the rivers overflow due to heavy rainfall, as in Limburg. In this case, the insurance companies do not reimburse. These types of exclusions make water damage insurance unclear to many citizens, notes Ypma van Independer.
Why does Storm work, where the damage is also great? “The damage from a storm is usually relatively minor,” says Ypma. “A broken car or dormer window is different than it was when your home was flooded. So the costs are less than flood damage costs; the latter is one of the hardest things in the world of insurance.”
Hotel owner George Lahij was technically bankrupt due to the floods – but he didn’t give up
The insurance company needed a lot of time to determine that the Walram Hotel in Valkenburg would not receive any compensation. An advance from the government saved the family business from bankruptcy.
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