Home insurance against atmospheric events: what you need to know

In 2023, the Legambiente Urban Climate Observatory documented a 22% increase in extreme weather events in Italy compared to the previous year, with a total of 378 events and an overall economic impact of more than 11 billion euros.

It is clear that climate change is exacerbating weather phenomena in Italy and around the world. Faced with this trend, thehome insurance against bad weather it appears to be an essential necessity to guarantee adequate protection of real estate assets.

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Italians not covered against natural disasters: only 5% are insured

Unlike many other countries, in Italy there is not yet an organic system to guarantee compensation for landowners in the event of extreme events. As emerges from the latest report from the National Association of Insurance Companies (ANIA) only a small percentage of Italians, about 5% of them currently have coverage against damage caused by natural disasters.

However, if until fifteen years ago this type of insurance was almost non-existent, we have recently noted an increase rapid increase, also driven by incentives such as the 19% tax deduction on the premium for fire and extreme weather policies.

Residential weather insurance typically provides affordable coverage for damage caused by rain, hail, lightning and high winds. This type of policy offers a compensation for damage to house components such as windows, shutters, solar panels, conservatories and faults in the electrical system and appliances.

According to the Italian Consortium for Insurance and Security Engineering (CINEAS) For adequate protection, it is important to also consider consequential damage coveragesuch as reconstruction, clearance and demolition costs, and ensuring reimbursement for loss of use of the property during restoration work.

Domestic policies: towards a public-private system

Until now, reconstruction costs have been borne by the state through public funding and tax breaks, a system that has, however, shown significant limitations such as inefficiencies and delays.

With the finance law of December 30, 2023, the Italian government introduced for companies the obligation to take out insurance against catastrophe risks from 2024. This measure aims to mitigate exposure to risk, encourage investments in security and prevention and enable a more efficient distribution of hedging costs insurance between the subjects concerned. A system that allows us to face the challenges posed by extreme events with greater resilience, protecting the national productive fabric.

However, the catastrophe insurance market presents certain challenges. One of the main obstacles is the volatility of premiums, which can fluctuate significantly in the event of a natural disaster. This instability makes it difficult for families and businesses to plan their spending reliably, especially during times of economic uncertainty.

How Spain and Turkey can inspire Italy

To overcome these limits and provide greater stability to exposed businesses and families, some countries have developed public-private systems, with state participation in the provision of coverage or reinsurance.

In Spain, the Insurance Compensation Consortium (Security Compensation Consortium – CCS) provides for a mandatory surcharge on premiums for private insurance policies to finance a public fund that covers damage caused by disasters such as earthquakes, floods and terrorist attacks.

During its stay in Türkiye, the Catastrophe Insurance Consortium (Turkish Catastrophe Insurance Pool – TCIP) is a public-private plan that mandates earthquake insurance for residential buildings.

The introduction of public-private systems similar to those in Spain and Turkey could also represent an advantageous solution for Italy. This approach would harness the expertise and resources of the private sector, while ensuring Adequate public support to make home insurance affordable to a large part of the population.

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