House and Home Insurance in France
- Finding an Insurer
- Types of Insurance Cover
- Holiday Home Insurance
- Insurance of Valuable Objects
- Terminating Your Insurance Policy
- Making an Insurance Claim
- Disputes with Your Insurance Company
5. Terminating your House Insurance Policy
Until 2015 car and house insurance policies in France were tacitly renewed each year, unless within the two months preceding the renewal date of the policy it was terminated by the insured person, save in particular cases.
5.1. Loi Chatel
In order to remind you of the renewal, since 2008 insurers have been obliged to give you due notice of the prospective expiry date of the contract.
The Loi Chatel obliges the insurer to send a letter/email 15 calendar days before the two-month notice period.
The letter must mention the annual premium or contribution due date and, above all, the option to terminate the contract.
If the insurer sends the letter less than 15 days before the notice period begins, the insured has 20 days to initiate the cancellation procedure upon receipt of the letter.
If the insurer simply does not send any reminder before the expiry date, the customer can cancel without giving any reason from the expiry date.
Thus, under Article L136-1 of the loi Chatel : "Le professionnel prestataire de services informe le consommateur par écrit, par lettre nominative ou courrier électronique dédiés, au plus tôt trois mois et au plus tard un mois avant le terme de la période autorisant le rejet de la reconduction, de la possibilité de ne pas reconduire le contrat qu'il a conclu avec une clause de reconduction tacite. Cette information, délivrée dans des termes clairs et compréhensibles, mentionne, dans un encadré apparent, la date limite de résiliation"
It goes on: "Lorsque cette information ne lui a pas été adressée conformément aux dispositions du premier alinéa, le consommateur peut mettre gratuitement un terme au contrat, à tout moment à compter de la date de reconduction."
"Les avances effectuées après la dernière date de reconduction ou, s'agissant des contrats à durée indéterminée, après la date de transformation du contrat initial à durée déterminée, sont dans ce cas remboursées dans un délai de trente jours à compter de la date de résiliation, déduction faite des sommes correspondant, jusqu'à celle-ci, à l'exécution du contrat. A défaut de remboursement dans les conditions prévues ci-dessus, les sommes dues sont productives d'intérêts au taux légal."
5.2. Loi Hamon
Since the 'Loi Hamon' 2014 there exists a right for consumers to terminate their car and house insurance policies at will, after the expiry of one year of the contract.
The right of termination is without charge and with full reimbursement of any unexpired premium. The termination date is at the discretion of the client.
Termination can be made by a simple letter or e-mail to your insurer, although probably best done by recorded delivery or visit.
Indeed, since 1st June 2023, if the insurer allows customers to sign up for a policy on-line, then they are obliged to allow customers to terminate in the same way. The rule applies however the contract may have been set up, and to those set up prior to 1st June 2023.
The following is a model letter you can use:
Je suis titulaire du contrat d’assurance habitation n° [policy number] souscrit le [date] et portant sur le logement situé [address].
Je souhaite résilier ce contrat conformément aux dispositions de la loi Hamon et de l'article L113-15-2 du Code des assurances. Cette résiliation prendra donc effet un mois après réception de ce courrier. Merci de bien vouloir prendre en considération ma demande et de me faire parvenir une attestation de résiliation.
Dans l'attente d'une réponse de votre part, je vous prie, Madame, Monsieur, d'agréer mes sincères salutations.
The insurer has 30 days to reimburse any premiums that are outstanding for the unexpired period of the contract. Beyond this time interest is payable.
Note, however, that in relation to car insurance policies a client can only terminate their policy provided they can demonstrate to their existing insurer that they have taken out a replacement policy with another insurer. The responsibility for the termination formalities in such cases rests with the new insurer.
The insurers successfully lobbied for this condition as they argued that without it there would be an increase in the number of consumers who were uninsured.
The terms of the new contract need not be the same as the existing contract, although, as a minimum, it must provide for third party cover - une garantie responsabilité civile.
The notice of termination must also be in writing by recorded delivery, and the policy itself will come to an end 30 days after receipt of the letter of termination by the insurer.
5.3. Other Rights of Termination
Where there is a change of risk or personal circumstances, or an increase in the insurance premium, there are separate procedures from Loi Hamon that exist for you to terminate your insurance policy.
i. Change of Risk
If by virtue of a change in circumstances you decide to change the level of risk covered by the insurance policy, but the insurer refuses to reduce the premium, then you can terminate your policy.
If it did not happen, you would need to send a recorded delivery letter terminating the policy, which would take effect 30 days' later. The insurer is then obliged to refund any overpaid premiums.
ii. Change of Personal Circumstances
A change of personal circumstances, such as marriage, employment, retirement, or termination of a business also allow you to cancel your insurance policy.
This right exists only provided the change of circumstances has a material bearing on the level of risk in the policy.
You need to advise your insurer within 3 months of the change of circumstances taking place and the contract will cease 1 month later.
Thus, if you move on 15th March, and this change of property would affect the level of risk the contract will end 16th April.
iii. Increase in the Insurance Premium
Insurance companies often use an indexation clause to change their premiums each year.
If the insurance premium should increase by an amount in excess of that permitted in the contract you can terminate the contract, normally on 30 days' notice.
You need to read the terms of your policy to be clear on the limits within which the premium may be increased each year without triggering the right to termination, as well as the notice period in the contract.
The clause does not operate where the premium has increased as a result of the loss of, or a reduction in, your no-claims discount, or a new tax, or a new insurance obligation imposed by the law.
iv. Sale of Property/End of Tenancy
If you sell your property, or you terminate the tenancy of a property, then the notice period is 10 days.
Thus, if you sold your house on 1st March, and you send a letter of termination to the insurer the same day, it takes effect 10 days later.
If you fail to terminate the contract automatically lapses within 6 months.
Of course, you can also transfer the policy to your new home if you so wish, although a new premium may be payable, depending on the risk to be covered.
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