Natural perils insurance
Naturskadeforsikring (natural perils insurance) is a statutory insurance against damage from natural disasters such as flooding, storms, storm surge, landslides, earthquakes and volcanic eruptions. In Norway the scheme is tied to fire insurance: anything covered by fire insurance is automatically covered against natural perils damage as well. You cannot buy fire insurance for a building without also being covered against natural perils damage.
The scheme is regulated by the naturskadeforsikringsloven (the Natural Perils Insurance Act) and is administered through Norsk Naturskadepool, of which all non-life insurers in Norway are members. The pool equalises natural perils claims between the companies, so that premiums and cover are the same across the whole country regardless of how exposed an individual property is. This means that a home in a flood-prone area pays the same natural perils premium as a comparable home on safe ground. The premium is calculated as a fixed per mille rate of the fire insurance sum.
There is an important boundary against damage that does not count as a natural disaster. Damage from ordinary precipitation that penetrates through roofs or walls, or from surface water and backflow in drains, is normally covered by ordinary building insurance and not by the natural perils scheme. Landslides, flooding and storm surge are covered by natural perils insurance; settlement damage, rot and wear are not. Compensation is based on the reinstatement value, that is, what it costs to return the building to the same condition, not on the market value.
For owners, managers and lenders, the key point is that the insurance exists, but that it does not remove the risk in physical terms. Insurers can set conditions, require protective measures or, in the worst case, reduce compensation if a building is put up in a known and mapped hazard zone in breach of the plan- og bygningsloven. The plot and the ground itself (as opposed to the building) are also not always covered, and natural perils damage to the ground may instead be handled by the state natural damage scheme at Landbruksdirektoratet. In a risk assessment it is therefore not enough to establish that the building is insured: you also need to look at the flood zone, landslide hazard zone, quick clay and climate risk to understand the likelihood of future events.
In Placepoint you can see flood, landslide and storm surge hazard zones as risk map layers over the property, as a basis for assessing natural hazards before purchase or development.
How the dataset appears in the map
The dataset is part of the map layer Risk:
From Placepoint's dictionary: Natural perils insurance
More information: Lovdata: naturskadeforsikringsloven, Norsk Naturskadepool, Finans Norge: naturskade
English: Natural perils insurance (mandatory, tied to fire insurance via the Norwegian Natural Perils Pool).
Frequently asked questions
What does natural perils insurance cover?
It covers damage to buildings and contents from natural disasters such as flooding, storms, storm surge, landslides, earthquakes and volcanic eruptions. The scheme is statutory and comes automatically with all fire insurance in Norway.
Is natural perils insurance mandatory?
Yes, indirectly. Under the naturskadeforsikringsloven, anything covered by fire insurance is automatically covered against natural perils damage as well. You cannot opt out of the natural perils part as long as you have fire insurance.
Does the insurance cover damage from rain and surface water?
As a general rule, no. Damage from ordinary precipitation, surface water and backflow in drains is a matter for ordinary building insurance. The natural perils scheme applies to damage from flooding in watercourses, landslides and storm surge.
Why is the premium the same regardless of how exposed the property is?
Because Norsk Naturskadepool equalises the claims between all the companies. The premium is set as a fixed per mille of the fire insurance sum, so that cover is the same across the whole country. The insurer can still set conditions or reduce compensation if a building is put up in breach of known hazard zones.