INSURANCE OF REAL PROPERTY AGAINST FLOOD RISK IN CURRENT CONDITIONS OF THE CZECH INSURANCE MARKET

In recent years there has been globally detected the provable increase of natural disasters and extreme weather events. The climatologists explain this weather swings by global climate change. This trend is evident not only globally but also in Europe and in the Czech Republic (CR). Evidenced by data of insurance companies, the insurance companies have paid off for disaster damage in CR the amount of over 90 billion CZK (3.6 billion EUR) during past fifteen years. The Czech Insurance Association (CIA), which is the professional association of Czech commercial insurance companies, highlighted the consistently increasing number of occurrence of losses and thereby the increasing number of claims and indemnification. According to CIA data year 2010 was evaluated as the year with the third largest burden of losses caused by natural disasters, behind 2002 and 1997. The most extensive damages are caused by floods, which are now becoming obvious in locations, which have not been affected by these phenomena so far. In this situation, insurance companies are forced to respond by raising premium prices for real property located in hazardous areas, or by alterations of insurance contracts. The reluctance of insurance companies to insure the property located in risky area become more frequent. In some cases, property becomes in terms of insurance conditions uninsurable. The aim of this paper is to provide an overview of current options for insurance of properties against flood risk on the Czech insurance market and to document the impact of flooding on the development of insurance conditions during last period. Paper demonstrates the importance of Insurance Flood Maps that are the basis for the determination of insurance premium by insurance companies and further analyses of insurability of properties placed in the risk zone no. 4 of Ostrava city.