THE TRANSITION FROM MONOPOLY TO COMPETITION - THE CASE OF HOUSING INSURANCE IN BADEN-WURTTEMBERG

In 1992 the European Community decided to abolish the housing insuranc e monopolies in Germany. In Baden-Wurttemberg this has led to the end of an institution that was more than two centuries old. The purpose of the paper is to analyse the (very negative) consequences this step ha s had for consumers. Particular emphasis is placed on two points: (a) the important increase in prices due to the additional costs imposed b y competition and (b) the difficulty of maintaining the global coverag e against natural damages, that was one of the hallmarks of the monopo ly situation.