Whether it is jewellery, works of art, fine wines, antiques or rare books or Persian rugs, the evidence suggests that most people are under-insured for valuable items they own.
Whilst your general French house insurance policy will offer some cover for such items, there will be a limit on the value insured, which is likely to be below the actual value of the object.
Many households do not insure these items as they consider the risk of theft to be low. Nevertheless, whilst this may well be the case in most areas of France, around 75% of claims concerning valuable objects actually arise from water penetration and damage.
Others do not do so as they are concerned at the possibility that the tax authority may be alerted to the existence of these objects, which may then render them liable to French wealth tax.
In reality, works of art and antiquities do not enter into the equation of liability for the tax, although this is not the case for jewellery and precious metals.
Moreover, insurance companies are not required to notify the tax authority each year of insurance policies covering valuable objects worth more than €15,000.
It is only on the death of the insured that an insurance company is obliged to inform the tax authority of insurance policies held be the deceased covering valuable objects.
Examine your standard French house insurance policy to establish what they define as valuable objects and the insurance cover they place on these items.
You will find that French house insurance polices vary considerably in what they define as a valuable object (objet de valeur), and the limit of their cover.
Nevertheless, depreciable household items in daily use over objet de valeur limits did not normally come into the category of a ‘valuable object’.
Accordingly, whether it is your home cinema system or your dishwasher, you need to see what the policies say about these general items.
You need to check the total level of cover for valuable objects in your standard house insurance policy. A policy may, for instance have an insurance cover of €50,000, but will offer maximum cover of €10,000 for valuable objects. If you own valuable objects with a value of €15,000 you will only receive €10,000 in compensation in the event of loss or damage.
You also need to consider whether the policy will operate in the event of prolonged absence from the property, an issue of direct relevance to those with a second home in France. Many policies exclude coverage if the property is empty for more than 90 days.
There may also be other limitations on the operation of the policy, such as a requirement for jewellery to be kept in a safe, a need for a certain level of security on the house, or a limitation on claims arising from accidental damage in the house.
In order to offer better insurance protection to these objects, you will either need to take out a 5 star insurance policy (haut de gamme) or arrange a specific insurance policy for particular possessions.
Most insurance companies offer 5 star policies, including Axa (Grande Demeures), Generail (Singulier) and Groupama (Demeure).
The key advantages of such policies is that they offer a higher level of guarantee on valuable objects, and there are normally fewer constraints concerning prolonged absence from the property.
Another alternative is to take out specific insurance for particular objects.
The major insurers in this market are Axa Art and Hiscox (Fine Art), who products are often more easily available through a broker, such as Aon Artscope or Solly Azar. Such contracts offer all the possibilities available, tailored to each individual object.
These contracts often provide for cover on the basis of a valuation given by an independent expert. This valuation will stay the same throughout the period of the contract, unless you act to specifically request that it be revised.
The annual premium payable is not necessarily that prohibitive. Expect to pay around 3/1000 of the amount insured, with around €300-€500 as the minimum level of the premium. However, if you want to ensure jewellery for loss outside of the property, then you can expect a far higher premium.
Needless to say, the insurer will have their own minimum requirements in relation to the security of the property.
Whilst is it possible to go to one of the major auction houses to obtain a valuation there are also a number of specialist professional bodies in France who can also assist.
Expect to pay from 1% to 3% for the valuation.