Italy | Government moves towards mandatory home insurance against climate risks

The government is relaunching the idea of ​​gradually introducing mandatory home insurance for damage caused by bad weather and seismic events. While in Emilia Romagna the counting of damages continues for the latest wave of rain, which has led to the flooding of several rivers with thousands of displaced people and interruption of public services, with the political controversy that does not subside between the majority and the opposition on the responsibilities for the delays in prevention works, the Minister of Civil Protection Nello Musumeci opens up again to the prospect of a policy for private homes on weather events. The debate has gained traction in recent years with the intensification of extreme weather phenomena. “It’s easy to talk about a new property tax on the house, I can already imagine the controversy when the issue of the house insurance is addressed. But a cultural change is needed. This is why the government has already applied itself to adopting a rule in the 2024 budget for insurance policies for companies, excluding agricultural ones: it’s a first step. We will gradually move towards the obligation for families to take out a home insurance policy against natural disasters”, explains Musumeci speaking at an Ania event on the economic impact of weather events.

The 2024 maneuver introduced the obligation for companies to take out insurance contracts for damages from catastrophic events, for its application, the Cat Nat implementing decree is missing. The idea would be to borrow a similar solution for homes, even if the calculation of a home insurance policy is affected by numerous variables that make the price range fluctuate. Musumeci highlights: “The time when the State could provide resources for everyone and forever is over. Prevention cannot be an obligation only for institutions: Every citizen must be aware of living in a risky territory and must take every initiative to avoid“. In Italy currently, notes the president of Ania Maria Bianca Farina, “only 6% of homes are covered against earthquake and flood risks” and “only 5% of businesses have a policy for the same risks”. In this context, Farina underlines, “the Government’s initiative to introduce mandatory coverage against catastrophic damage for all businesses is a fundamental step to reduce the gap”.

According to Ania, 2023 will be among the most expensive years in history for weather event insurance policies. For the fourth consecutive year, insurance claims exceeded $100 billion globally. In Italy, there has been a spike in insured losses: over 6 billion euros, of which 5.5 billion attributable to weather events and 800 million euros to floods in Emilia-Romagna and Tuscany. The Minister of Economy Giancarlo Giorgetti recalls that “these events have long-term negative economic consequences, as they disrupt markets and put a strain on public finances. Climate change and global development models are further accelerating the frequency and severity of such disasters, which pose significant risks to economic and financial stability”. The Minister of the Ministry of Economy and Finance adds: “Well-designed public-private insurance programmes can help mitigate the effects of accessibility challenges for high-risk insured persons”. The President of Ivass Luigi Federico Signorini points out that it is “essential” that reimbursements “are, and are perceived as, rapid and predictable” and the extent of coverage offered must be “adequate”.