European Insurers Expect Millions of Euros in Flood Claims

August 16, 2002

Many European insurers expect claims totaling millions of euros as flooding that has heavily damaged areas of the Czech Republic and Austria now threaten eastern Germany.

Reuters reports that several European insurers’ financial standings are already precarious due to claims related to Sept. 11 and poor investment returns.

By German chancellor Gerhard Schroeder’s estimates, once floodwaters affect southern and eastern portions of Germany, the cost of damages could cost billions of euros.

Dresden and other eastern German cities have already been damaged, but homeowners in those areas are well insured through policies created when the former East German government controlled insurance, according to a Munich Re spokesman.

Munich Re also estimated that in an average year such as 2001, flood claims in Germany totaled 500 million euros ($493.6 million).

Gregor Kozak of the Austrian Insurance Association explained that in that country, not all flood damage would be covered by insurance. Flood risk limits for most policies are usually about 3,600 euros for standard-sized houses, Kozak noted.

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