INSURANCE IN FRANCE » Kikitravels

The French have a different approach to insurance compared to what many newcomers might be accustomed to. When it comes to liability, for instance, having coverage is often necessary. The purpose of this guide is to provide a comprehensive overview of insurance in France and ensure that you have the appropriate coverage while residing in the country. France is considered one of the leading insurance markets globally and ranks fifth worldwide, second in Europe after the UK. In 2017, the French insurance sector generated a revenue of €293 million and boasts a total of 285 insurance companies operating within the country.
Insurance regulations in France are overseen by the Banque de France through the Autorite de Controle Prudentiel et de Resolution (ACPR). The French Insurance Federation (Federation Francais de l’Assurance – FFA) represents over 260 insurance companies in France.

French residents are legally obligated to have certain types of insurance coverage, while optional additional policies are also available for purchase. There is a wide range of companies and policies to choose from, including options to contact insurers online, through local agents or brokers. Banks and supermarkets in France also offer insurance policies. Notable insurance companies in France include AXA and GMF. For further information on insurance providers, you can consult our directory of insurance companies operating in France.

Insurance is an agreement between you (or your business) and an insurance company that provides financial protection against unforeseen events such as accidents, illnesses, natural disasters, or other unexpected situations. It can also help maintain good health by covering the costs of routine care in medical, dental, or vision insurance cases.

The policy is the actual contract that specifies the coverage details. It includes information about who or what will be protected under the agreement, the conditions under which the insurance company will make payments, who will receive those payments, and how much they will receive.

HOW DOES INSURANCE WORK?

An insurance policy is a legally binding agreement between an individual and an insurance company. It outlines the terms and conditions under which the insured person or their chosen beneficiary will receive financial benefits from the insurer.
Insurance serves as a means of protecting oneself and loved ones from potential financial hardships. By purchasing an insurance policy, individuals transfer the risk to the insurance company, which provides coverage in exchange for a premium payment.
In the event of an unforeseen circumstance, such as illness or accident, the insured individual or their designated beneficiary can submit a claim to the insurer. The insurer then assesses the claim based on predetermined criteria and proceeds with settling it accordingly.

TYPES OF INSURANCE IN FRANCE

LIFE INSURANCE:

Life insurance is a form of insurance that provides a financial payout to designated beneficiaries in the event of the policyholder’s death. This financial support aims to safeguard the policyholder’s family or loved ones from economic hardships in case of their untimely demise, as well as in situations where they experience disability, dismemberment, or critical illness.

A life insurance policy is an agreement between a person and an insurance company, where the insurer promises to provide financial security to the policyholder in exchange for a set fee called a premium. Generally, the terms of the contract include details about who will receive the payout, the amount that will be paid, and how long the policy will remain in effect.

2. HEALTH INSURANCE:

Health insurance plans available in France are fundamental indemnity-based insurance products tailored to offer financial support for medical expenses incurred due to hospitalization or critical illnesses.

Health insurance in India constitutes a contractual agreement between an insurance provider and a policyholder, guaranteeing coverage for medical expenses in case of injury or illness requiring hospitalization.
This coverage encompasses various medical costs such as hospitalization fees, treatment expenses, surgical procedures, and other related medical charges.
Typically, top health insurance providers in France are affiliated with extensive networks of hospitals, facilitating seamless cashless treatment options for policyholders.
Moreover, health insurance policies also mitigate the financial strain caused by loss of income during treatment, thereby stabilizing family finances. Essentially, opting for the best health insurance plan in India ensures access to quality medical care without depleting personal savings.

All inhabitants residing in France are required to possess health insurance. Since 2016, the Protection Universelle Malade (PUMA) has ensured coverage for residents within the nation. This extends to expatriates employed in France from their initial day, whereas other lawful residents can avail themselves of state health insurance after three consecutive months of residing in the country on a ‘stable and regular basis’.

Nonetheless, the PUMA scheme does have its limitations. Consequently, numerous expatriates and French nationals opt to acquire supplementary private insurance. Leading private international health insurance providers catering to expatriates include:

Allianz Care
Cigna Global

3. HOME INSURANCE:

Whether you’re a tenant or a homeowner in France, it’s mandatory to have home insurance before moving into your residence. Approximately 90% of homeowners opt for a comprehensive policy covering multiple risks, although standalone coverage options are also available. The essential aspects to be covered by home insurance include:

Building insurance: This safeguards against damages to the structure caused by various factors such as fire, water damage, natural disasters, and vandalism. Specific coverage details may vary, so it’s important to review individual policies. While it’s obligatory for renters and homeowners with mortgages, outright property owners are exempt.
Public liability insurance: Compulsory for all residents, it protects against personal responsibility for third-party damages and property. Tenants usually require this coverage. It can be procured separately as third-party liability insurance, but many home insurance packages include it.
Contents insurance: This is optional and covers personal belongings. It’s often more cost-effective when bundled with a multi-risk home insurance policy.
Construction insurance: Mandatory for major construction projects on your property, it’s provided through a ten-year cover known as “dommages ouvrage,” which guards against construction defects. Some multi-risk packages incorporate this, or it can be purchased separately.

Policy premiums can range from approximately €100 to €300-400 annually, depending on property value and the extent of coverage. Expatriate-friendly insurance brokers, like Allianz Habitation, can assist in obtaining coverage or offering guidance, often in English.

It’s crucial to thoroughly review the terms and conditions of any policy, particularly regarding deductibles and property protection obligations. Certain policies may require installing an alarm system or closing shutters at night or during extended absences.

Some home insurance plans may encompass liability coverage for any harm or damage caused by your child at school, while others may offer it as an extra feature for a nominal charge. In both cases, your insurer will furnish a certificate or attestation requested by the school at the beginning of each academic year.

While not mandated for school admission, this documentation is essential for involvement in activities outside the regular curriculum, including field trips and extracurricular sports.

4. MOTOR VEHICLE INSURANCE:

In France, it’s mandatory to insure all motor vehicles against collision liability, even if they’re not in use, unless all four wheels are removed. Insurance options include third-party (tiers collision), third-party fire and theft, or comprehensive (tous risques). Major car insurance providers in France include Allianz Auto, EuroAssurance, and Groupama – Auto.

When driving, you’re required to carry proof of insurance known as the “attestation d’assurance,” including a green “certificat d’assurance” affixed to your vehicle windscreen for visibility. In case of an accident, your insurer will provide you with an internationally standard form called “le constat amiable” to be completed.

The cost of car insurance in France varies based on factors like vehicle value, coverage extent, and driver history. No-claims deductions accumulate at a rate of 5% annually, with it taking 13 years of no-fault driving to attain a full 50% no-claims bonus.

Some drivers may offer to pay for damages directly to avoid increasing their insurance premiums. However, accepting such offers requires careful consideration. If the repair costs exceed the amount received from the other party, there’s no recourse to an insurance claim.

5. COMMERCIAL INSURANCE IN FRANCE

When establishing a business in France, obtaining appropriate insurance coverage is crucial to safeguarding your assets and reputation. While some insurances are obligatory, others are optional. The key ones include:

Business liability insurance, also referred to as public liability and professional indemnity insurance (l’assurance en responsabilité civile professionnelle). It is mandatory for all limited companies. Freelancers or sole traders may be able to extend their personal liability insurance to cover business activities, albeit with additional costs and specific activity specifications.
Premises, equipment, and vehicle insurance, which can be acquired separately or bundled into a multi-risk policy (assurance multi risque et perte d’exploitation). Although not mandatory for most businesses, it’s highly recommended to mitigate risks associated with theft, fire, water damage, storms, etc.
Business interruption insurance (assurance perte d’exploitation) safeguards against income loss, including employee salaries, in case the business becomes inoperable for a period. Some insurers offer packages that combine this coverage with premises, equipment, and vehicle insurance.
Assurance décennale, compulsory for trades such as builders, plumbers, and electricians. It provides coverage for work quality defects over a ten-year period.

GETTING INSURANCE IN FRANCE

Getting insurance in France follows a somewhat similar process to many other countries. Here’s a general guide:

1. Determine Your Insurance Needs: Understand what type of insurance you require. This could be health insurance, home insurance, car insurance, etc.

2. Research Insurance Providers: Look for insurance companies operating in France. You can do this through online research or by asking for recommendations from locals or expats.

3. Compare Policies and Prices: Once you’ve identified a few insurance providers, compare their policies, coverage, and prices to find the best fit for your needs and budget.

4. Contact Insurance Companies: Reach out to the insurance companies you’re interested in either by visiting their offices, calling them, or filling out forms on their websites.

5. Provide Necessary Information: When applying for insurance, be prepared to provide personal information such as your name, address, occupation, and any other details required by the insurance company.

6. Submit Required Documents: Depending on the type of insurance you’re applying for, you may need to submit certain documents such as identification, proof of address, or proof of income.

7. Review the Policy: Carefully review the terms and conditions of the insurance policy before signing or agreeing to anything. Make sure you understand what is covered and what is not, as well as any deductibles or limitations.

8. Pay the Premium: If you’re satisfied with the policy, you’ll need to pay the premium to activate your insurance coverage. This can usually be done through bank transfer, direct debit, or other payment methods accepted by the insurance company.

9. Receive Your Insurance Documents: Once your payment is processed, you should receive your insurance documents, including your policy certificate and any other relevant paperwork.

10. Keep Your Policy Updated: It’s important to keep your insurance policy updated with any changes in your circumstances, such as moving to a new address or buying a new car. This ensures that you remain adequately covered at all times.

Remember that insurance requirements and procedures may vary depending on the type of insurance and the specific insurance company you choose. It’s always a good idea to do thorough research and, if necessary, seek advice from professionals or experienced individuals in France.

IMPORTANCE OF INSURANCE

Insurance serves as a safeguard for yourself, your family, and your assets. By partnering with an insurer, you can mitigate the financial burdens of unforeseen medical expenses, hospitalization, car accidents, property damage, theft, and liability for injuries to others. Additionally, in the event of your demise, an insurance policy can provide your loved ones with a lump-sum cash payout. Ultimately, insurance offers peace of mind by addressing various unexpected financial risks.

Insurance functions as a protective cushion that aids individuals and families in recovering financially following unforeseen events. Whether for businesses or personal matters, insurance offers significant benefits.

Risk Distribution: Insurance operates as a financial mechanism where the risk of substantial loss resulting from an event is shared among a large group of individuals or businesses facing similar possibilities. This distribution of losses across a broad spectrum makes them manageable for each party involved.
Financial Stability: In the absence of insurance, businesses could incur exorbitant costs in rebuilding after significant losses such as inventory damage. Natural disasters, accidents, or theft can profoundly impact the financial standing of both businesses and families. Insurance mitigates a considerable portion of these losses, facilitating a smoother recovery process.
Contribution to Economic Growth: Insurance companies amass substantial funds, some of which can be channeled into supporting government investment initiatives. Due to safety considerations, insurers typically invest in government securities, thereby aiding economic growth. Conversely, governments can easily procure funds from insurers for large-scale public projects, fostering further economic development.
Long-Term Wealth Accumulation: Many insurance products, particularly life insurance, entail long-term commitments extending over decades. Over this duration, significant wealth accumulates, which either benefits the policyholder upon survival or passes on to their family in the event of their demise.

CONCLUSION

Insurance plays a vital role in shielding both you and your family from unforeseen financial burdens, thereby reducing the risk of accumulating debts or facing asset loss. It serves as a protective measure against costly lawsuits, injuries, property damages, loss of life, and substantial losses pertaining to your vehicle or home.

In certain instances, your state or lender may mandate insurance coverage. While there exists a multitude of insurance policy options, some prevalent ones include life, health, homeowners, and auto insurance. Selecting the appropriate insurance type hinges on your individual objectives and financial standing.