Germany system
Germany has a high take-up rate, but is it true to say that their system still suffers from "affordability&availability" issue?
They have a sophisticated flood mapping tool and this has led the insurers to determine properly the insurability and price, but according to the risk zone table, "High-risk" are still uninsurable and wouldn't the policies in "low-risk" and "moderate risk" zones pay actuarially sound but very expensive premium whilst "very low zone" be charged barely anything?
I can't help feel that the German system still suffers from the inevitable underlying problem of flood insurance and that the only thing it has done is to better classify the risks and that it is not penalizing those in "low-risk" zones.
Thank you,
Comments
Actually, my interpretation of the German system is a little different from yours. The uptake is listed as 25-30%, which didn't seem that high. That's in the middle of the 7 countries listed in the table. But maybe, as you implied, that's evidence that the system isn't working as well as it could.
It sounds like they have a very strong approach, given that only 3% of policies are in the high-risk, uninsurable category. But then you would think that the other 97% would purchase the flood endorsement. Maybe people in the very low risk category don't buy it because they think they don't need it, even if it would be very cheap. I wish the reading had provided uptake rates by category so we would know.
To your question on whether Germany suffers from affordability & availability issues: The article provides so little information that it's hard to draw a conclusion. I'm guessing the main reason the U.K. system is offered as the best model for Canada is the U.K. uptake rate of 95%. I can't see much else that's different between Germany and the U.K., at least with the information provided in this short reading.
Sorry, I don't think that answers your question! They probably won't ask about Germany anyway!