Prime Minister Gabriel Attal announced on Tuesday a reform of the natural disaster regime which makes it possible to reimburse damage after severe bad weather, to prevent insurers from refusing to cover property in certain regions. “We will evolve the natural disaster regime to modernize it and prevent certain insurers from abandoning the territories most at risk,” promised the head of government during his general policy speech to the National Assembly.
In mainland France, the natural disaster guarantee, included in property damage insurance contracts (for example multi-risk home contracts), covers all these perils except wind which is subject to the storm guarantee: floods, mudslides, drought, earthquakes, avalanches, landslides…
A state of natural disaster may be declared when one or more of these events occurs with abnormal intensity. It is up to the administration to analyze commune by commune whether the conditions are met. The natural disaster guarantee provides coverage for material damage caused to insured property. It is financed by a surcharge, which must increase for home damage contracts from 12 to 20% on January 1, 2025 - the system being in deficit.
Concretely, the Central Reinsurance Fund (CCR), a public entity, covers part of the damage, and is itself reinsured by the State if necessary. This regime created in 1982, however, shows its limits especially as natural disasters multiply, increasingly linked to climate change.
The sums at stake are enormous: natural events are expected to cost a total of 143 billion euros over the period 2020-2050, almost twice as much as in 1989-2019, according to France Assureurs. Some insurers are already refusing to insure property in exposed areas, or are increasing their rates.
In addition to strengthening the natural disaster regime, the profession readily speaks of risk pooling between insurers, increased prevention or “the dissemination of a culture of natural risk among our populations”. Former insurer Thierry Langreney was commissioned by the government to carry out a study on the insurability of climate risks. He must return his copy in the coming weeks.