Insurance - Insurance in France

However, to make sure you don’t fall prey to some of the pitfalls associated with the French insurance market you should follow some simple tips, says Laurent Schonbach

It’s easily done. Having engineered the finances, battled the local bureaucracy and even learnt the language, all in order to buy your dream French holiday home, it’s perhaps human nature to skim over the insurance details of your new property. This is happening to a large number of Brits who are buying abroad. According to Datamonitor, up to two million overseas properties are owned by the British – 25% of which are in France. Yet, when it comes to the crunch, too many property owners are finding they are not adequately covered.

The danger is that each country has its own specific insurance peculiarities and exclusions which may apply if you buy a local insurance product. It is vital that you are aware of and understand the terms and conditions of the product being offered so if the worst should happen, you are not left to pay a large amount of the claim yourself or, even worse, find out you are not covered at all. To make things more manageable and to give you a better understanding of what to look out for you should follow three simple tips.

First of all, you must be absolutely clear about what you will use your property for. Secondly, you should understand what you’re buying in terms of insurance and who you’re buying from because, as with all things, knowledge equates to power. The more you know, the better position you will be in when it comes to buying your insurance. Thirdly, you should shop around and don’t feel pressurised into taking out the first policy you find. In particular you should consider whether, in the event you should make a claim, the insurer will be able to provide you with the service you need, or will it prove to be one long headache with you doing most of the work.

Be clear about what you will use your property for Before signing on the dotted line make sure you are clear about what you will be using your property for. Will it be an occasional holiday home used once or twice a year, a semi-permanent residence, or an investment you will rent out to tourists? The use of your home fundamentally dictates the cover you need. Depending on usage there are a few insurance blackholes particular to France to keep an eye on.

With many French policies, theft cover is often restricted if a home is unoccupied for more than 90 consecutive days. It is an exclusion that is easy to miss but has huge implications if you plan to use your property as an occasional holiday home. Make sure your insurer is clear with you on theft cover. Another example of the use of a property determining the cover concerns personal liability. This is vital if you plan on renting out your home to tourists or other guests. If this is the case, a high level of liability insurance is essential to protect against the scenario of one of your guests injuring themselves at the property and deciding to sue (as a rule of thumb £2,000,000 is viewed as a good level of cover by UK insurers for overseas homes).

Understand what you’re buying and who you’re buying from In France, the majority of insurance agents are not independent brokers – they are tied to a single insurer. Because of this they won’t search the market for the best product. Instead they will sell you the product offered by their company, which may not always be the best one for you. It is important that you read the policy and ask questions about the cover, to avoid disappointment when a claim occurs.

Don’t assume that what is standard cover for your home in the UK is also provided by your French insurance policy. The UK has a long tradition of insurance and competition is stronger than in many other markets. Customers have benefited as insurers have had to constantly improve their products to stay competitive and match client’s expectations. This is not the case in continental Europe. Cover against breakage of contents, for example, is taken for granted in the UK and yet is almost always excluded in the French market.

Wider buildings cover (for structures such swimming pools, outbuildings, tennis courts and perimeter walls) is frequently restricted. The rule is not to assume anything is covered by your insurance policy unless it is explicitly indicated in the policy. In case of doubt, ask your agent to confirm it in writing. Take time to get to know the market Finally, given the pitfalls and the range of products that are out there, it is important to take your time and get to know the market. Don’t be coerced into buying a policy from someone recommended by your notaire, lawyer or estate agent. There have been cases where owners of French properties have been told they must buy a policy from a French insurer and that only policies written in French are This is not the case and European law allows UK insurers to offer services in all other EU countries and homeowners are free to purchase a policy drafted in their preferred language.

When looking for insurance it pays to think ahead. The old cliché is quite true; you never know how good an insurer is until you have to make a claim. Make sure you speak to your insurer about the claims service they provide and the level of bureaucracy you are likely to have to put up with to claim what is rightfully yours. You should ask whether your insurance claim will be dealt with by an English speaker. Unless you are very comfortable with the French language it is a wise precaution to ensure you will be dealing with an English speaker. Suffering damage or a theft to the home can be deeply upsetting.

This can be made all the more traumatic by a baffling and confusing claims experience. If you then factor in the likelihood that you may not be in the same country as your property when making your claim, the need for peace of mind from your insurer is paramount. If you have already bought an insurance policy and, having read the small print, are unhappy with it, all is not lost. A clause in the French insurance market says that the policyholder has to give at least two months’ notice prior to renewal if they wish to change their insurer. It is worth noting though that to enforce this claim your insurer must remind you each year, prior to the beginning of the notice period, of your cancellation rights.

Otherwise you have 20 days following receipt of your renewal invoice to inform your agent if you do not wish to renew. While it’s true that arranging insurance can be a minefield, if you take time to shop around and speak to insurers at home and abroad, you will find a policy that is comprehensive and right for your needs. And once it’s all done and dusted, you can sit back and enjoy a generous glass of wine, safe in the knowledge that your pride and joy is fully protected.

by Hiscox, Laurent Schonbach, overseas specialist Tel: 0845 365 1465 www.overseashomes.hiscox.co.uk

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