East-West Divide on German Flood Coverage

For a man whose floors are covered in mud, whose new winter garden faces serious repair and who has to endure life without heat or electricity in the coming months, Eberhard Mattschke is in a relatively good mood.

“I look at it very positively,” the longtime resident of Dresden’s Laubegast neighborhood said of the flooding that swamped his property over the weekend. “All the material things we can replace.”

Mattschke, like roughly three million other residents of the former East Germany, probably has good reason to smile. Unlike many West Germans, the insurance the former communist government provided for all of its citizens, including Mattschke, covers flood damage.

That means that a good portion of the residents of towns along the flooded Elbe River will be able to repair a good deal of the damage wrought by last week’s floods and send German insurance behemoth Allianz the bill.

Allianz pays the bill

Allianz took over the roughly six million insurance contracts of East German citizens after reunification in 1990. The contracts were much more comprehensive than those given to West German citizens. Even stolen bikes were included among the items that could be claimed.

In the past decade, roughly three million of those contracts have expired or been cancelled. Of the remaining three million, 60 percent cover flood damage, according to the German Association of Insurers. The percentage of contracts in the former West Germany that cover such damage numbers only in the single digits.

Neither Allianz nor Munich Re wants to estimate the amount of damage continued flooding has wrought on the regions along the Elbe River. The amount, said one spokesman, would most likely change each week anyway.

Company payed out more this year

But the damage could hit Allianz, which is already paying out more for storm and hail damage in the first half of 2002 than it did in the first half of 2001. The 3.4 billion euro given out is five times the amount in 2001 and the 213,000 cases reported is also an increase, according to Allianz figures.

The news could not bode well for those that want to insure their homes against future natural disasters.

“The insurers don’t want to carry the risk anymore,” Michael Wortberg, an insurance expert, told the "Süddeutsche Zeitung" newspaper.