Around 2,000 claims have so far been received by the insurance companies after the storm Hans progress. New reports keep coming in and it will take some time before it is clear what the damage cost – and who will pay.
According to the law, water pipes must be sized to handle a statistical 10-year rainfall. When it is met, the cost falls on the individual home owner and their insurance company. If it is not fulfilled, the municipality must pay. This means major risks for municipalities that do not adapt to a changing climate, warns the industry organization Swedish Insurance.
Claims worth billions after the torrential rains
The insurance companies estimate that around 60 percent of all cases of flooded basements are due to deficiencies in the va system where the insurance companies can demand compensation from the municipality. One municipality that is hit particularly hard is Gävle. After the downpour in 2021, the requirements cover more than 2,000 cases with a value of SEK 1.2 billion.
Gävle’s municipal company Gästrike Vatten has already had costs of several hundred million and set aside SEK 250 million for affected homeowners. There may be even higher costs before all insurance matters are investigated.
– It will affect both tax and rate collectives in Gävle municipality to a large extent, says Fanny Spennare at Gästrike Vatten.
Municipalities in a pinch
According to Pär Dalhielm at Svenskt Vatten, the municipalities have several challenges: new legal requirements, growing population and a maintenance debt dating back decades. The investment requirement in Sweden’s VA is currently SEK 560 billion. Ultimately, the cost needs to be recovered through the fee.
– Today, the average cost for water and sewage is SEK 8,500 a year. We expect at least a quadrupling by the year 2040.
Legislation based on so-called 10-year rains does not hold up in a changed climate, he says, and calls for the government to take greater national responsibility.
– The major measures must take place above ground by creating green areas, stormwater dams and reviewing elevations. Many municipalities do not even know where their shortcomings are.