Household Insurance Rules to Change

The Government has announced that it is to introduce major changes to the system of household insurance for natural disasters, such as major storms, flooding and ground movement. Under the present system, the government must declare that an ‘official’ natural disaster (called a catastrophe naturelle ) has occurred before you can make a claim on your household insurance. In future, it is proposed that a decision as to whether or not the relevant clause in your insurance policy can be invoked will be left to the insurance companies to decide. Many consider that the main reason for the change is to allow insurance companies to increase the premium for insurance against natural disasters. At the present time, the premium element in a policy for natural disasters is controlled by the government. In future, insurance companies will be able to set their own rate. This is likely to mean that the premiums payable by those in areas that may prone to a natural disaster will be higher than those living outside these areas. Insurers have stated that this breaches the general principal of national solidarité that has hitherto governed the operation of household insurance policies. One beneficial effect of the change may well be that it will speed up the time it takes to get compensation, as an insurer will be able to declare a natural disaster within days of it occurring. At present, it regularly takes months (years in some cases!) for the government to make up its mind. Conversely, there is the risk that similar claims within a locality may be treated differently by the insurers. So, whether or not you are able to make a succesful claim, may become a bit of a lottery.