What is natural hazard insurance in Germany?

Natural hazard insurance offers specific coverage against damage caused by natural events such as heavy rain. Heavy rain is a weather phenomenon characterized by very large amounts of rain falling in a short period of time. This sudden and intense rain can cause significant damage to buildings, particularly through flooding, which often accompanies heavy rain.

What does a German natural hazard insurance cover in the case of heavy rain?

This insurance covers the following types of flood damage:

Heavy rain can cause canals, rivers, or other waterways to overflow their banks, flooding buildings, properties, and infrastructure. The insurance covers the costs of repairs, restoration, and any necessary replacements.

Backflow: Heavy rain can also overload sewage systems. When water can no longer drain away and is forced back into buildings, this is called backflow. The insurance typically covers the costs of repairing the resulting damage.

Damage to buildings and contents: Rainwater can penetrate buildings and cause significant damage to walls, floors, electrical systems, and contents. Natural hazard insurance covers the restoration and repair costs.

Key aspects of natural hazard insurance:

Location of the company: The company’s location plays a crucial role. Businesses in high-risk areas (e.g., near rivers or in low-lying areas) are particularly vulnerable.

Preventive measures: Some insurers expect companies to take certain precautions to minimize the risk of damage from heavy rain, such as installing backflow preventers or sealing building components.

Check the scope of coverage: It is important to review the exact scope of coverage provided by the insurance policy. Some policies only cover specific types of heavy rain damage, or certain exclusions may apply.

Cost of natural hazard insurance: The premium for natural hazard insurance in Germany can vary considerably depending on the risk and location. Premiums may be higher in regions that are regularly affected by heavy rain. Furthermore, the deductible can vary depending on the agreement. Please consult your insurance broker for the most cost-effective solution.

Coverage situations in natural hazard insurance in Germany:

1. Workshop (e.g., automotive, metal, or craft workshop)
From the insurer’s perspective, workshops are more vulnerable to:

low-lying rooms, oil separators, pits
many machines, motors, electrical controls
high value of tools and consumables
The following damages are covered by natural hazard insurance:
flooding of yard or workshop area
backflow with water entering pits and basements
snow pressure (hall roof)
landslide/subsidence
heavy rain with water entering through gates or drainage.

Typical compensation amounts in natural hazard insurance

These vary depending on the location (especially water hazards), but the following guidelines can be given:

For the building
generally full value (replacement value) without a fixed upper limit
Reconstruction costs for halls: depending on size, quickly exceed €1 million.

For business equipment and machinery
Typical sums: €100,000 to €1 million
Sensitive control systems are usually fully covered (less deductible).

Goods, spare parts, tire inventory
€20,000 to €150,000, depending on the business
Often individually agreed upon for valuable special parts
Business interruption
Term: 12–24 months
Compensation amount: dependent on annual turnover (e.g., €300,000–€1.2 million)
Deductibles
Natural events: often €2,500–€10,000
In high-risk areas, a percentage or at least 5–10% per claim.

Critical points for workshops:

Oil storage and hazardous materials -> insurers inspect the operating equipment.
Hall roofs with low load-bearing capacity -> risk of snow pressure.

Coverage situation for office buildings (with or without tenants):

Typical risks for office buildings:
Mostly fewer machines, but high-quality IT equipment.
Damage often has indirect effects (water, moisture).
Location factors (heavy rain, flooding) strongly influence the premium.
The following damages are covered:
Flooding of outdoor areas or underground parking garages.
Backflow in technical rooms.
Earthquakes/subsidence.
Snow pressure on flat roofs.
Avalanches are only relevant in exposed locations.
Typical compensation amounts for buildings and inventory:

For office properties, typical replacement value: €1–5 million, depending on size.
Technical building equipment:
Heating systems, elevators, server rooms.
Mostly fully covered.
Possible sublimits for backflow (e.g., €100,000–€250,000)
Office furniture & IT
€50,000–€500,000, depending on equipment
Server rooms often have special requirements (e.g., location across a street)