Homeowners have to contribute after severe earthquake

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Major earthquakes such as the one in Sierre USA in 1946 are rare in Switzerland. It had a magnitude of 5.8, four people died – it was Switzerland’s last earthquake with fatalities.

Such strong earthquakes occur on average every 50 to 150 years. This is evident from the first publicly available earthquake risk model for Switzerland, which was presented on Tuesday. However, if such a severe earthquake were to occur, high financial losses can be expected.

Only: It is unclear who would pay for the damage in such a case. Because there is no compulsory earthquake insurance throughout Switzerland. Therefore, only about 15 percent of buildings in Germany are insured against earthquake damage.

Homeowners have to pay

Next to pandemics and power shortages, earthquakes are among the most underestimated risks for Switzerland. In 2021, therefore, against the will of the Bundesrat, parliament decided to have the basis for a new approach worked out: the contingent liability.

It states that homeowners contribute financially to reconstruction in the event of a major earthquake. Unlike insurance, for example, where the premium is paid regularly, the necessary contributions for contingent liabilities only have to be collected afterwards. This would mean that all homeowners would contribute to the reconstruction – regardless of the location of the earthquake.

The following benchmark should apply: All homeowners contribute a maximum of 0.7 percent of the home insurance amount to cover damage. This could currently cover damage to buildings up to around CHF 20 billion.

Federal Council sees responsibility in private

The Committee on the Environment, Spatial Planning and Energy of the Council of States (Urek-S) initiated the contingent liability. Last November, the Federal Council instructed the Federal Public Service Finance (FDF) to prepare a consultation draft by December of this year. After the parliament, the people and the cantons would also have to vote on the constitutional amendment before it can enter into force.

However, the topic of earthquake insurance is controversial. A minority in parliament rejected the proposal, arguing that it is already possible for all homeowners to purchase earthquake insurance. Responsibility must remain with the private sector.

Compulsory insurance at national level has so far had as little chance as an agreement between the cantons. The Federal Council has also had fundamental concerns so far. Compulsory earthquake insurance has not been able to achieve a majority for 25 years, as the then Minister of Finance Ueli Maurer (72) noted in the relevant council debate in 2021. One reason for this is that there are good private models nowadays.

Source:Blick