Insurance: natural disaster zone

Two people died and thousands of homes were damaged in floods and mudslides in the Var last month. It came after widespread flooding in the north-west from Storm Dick at the end of 2013. Such disasters involve special insurance rules, as we explain.

LAST month (January) brought disaster to the Var, hard on the heels of the devastation caused by Storm Dick in Brittany and by Cyclone Bejisa in the overseas territory of Réunion.

Parts of Brittany and Réunion were classified as natural disaster zones for insurance purposes on January 18, while a second batch for Brittany and a declaration for the Var were expected to be imminent on going to press.

Most home insurance policies include cover for natural disasters (catastrophes naturelles). A typical “multirisques” policy will include damage from earthquake, flooding, drought, landslide and surging waves – and an insurer cannot refuse to cover you for this, unless you live on land which is considered not fit for construction or in violation of planning laws.

However, insurers will only process claims once a state of natural disaster has been declared by ministerial decree (arrêté interministériel). This clearly defines the zones affected and the nature of the damage. It is up to each individual mayor to request disaster status at the préfecture of the department. The préfecture then assesses the degree of damage and passes the case to the Interior Ministry, which calls on an interministerial committee on natural disasters to decide whether to publish a decree, which then appears in the Journal Officiel. It can take months for the status to be granted, although the government committed to acting fast following the storms over the festive period.

Once the status has been declared, policy holders have a limited window to start their claim – 10 days from publication in the JO – although insurers recommend you do not wait for the declaration and instead lodge the claim as soon as you become aware of damage, even if the payout will have to wait until the decree is published. The French federation of insurance companies FFSA states 10 days refers to calendar days starting from the day after the incident.

A claim can normally be started by telephone or fax and the supporting documents can be sent after the 10-day deadline if the case has already been opened. Special second home insurance policies often include a provision for an expert to visit your property and assess the damage themselves if you are away when a natural disaster happens.

You will need to supply a description of the damage, a list of all the lost or damaged items and proof of ownership and their value (bills, photographs). You must not throw any damaged items out: the insurer may call an expert to visit and assess the validity of the claim. If you need to carry out any urgent repairs or cleaning, you should take photos first.

You are covered for the items included in the policy, within the limit of the maximum payout and minus any eventual excess as defined in the policy.

If none is defined, a default excess is applied by law – €380 (but €1,520 if the damage is due to subsidence resulting from a drought or heavy rainfall). Only direct costs are covered – not indirect costs such as loss of earnings.

However, insurers can apply up to four times the legal maximum excess if you are unlucky to live in a property that has been hit by a succession of natural disasters over the past five years, such as repeated flooding, and the local mairie has not drawn up a prevention plan, called a PPR (plan de prévention des risques naturels). It is worth checking with your mairie when buying a house, as this could significantly increase the cost of being covered.

The legal maximum delay for payment is three months – but many policies have more favourable payment turnarounds than this. The FFSA, says relatively simple claims (such as damage to a flooded basement) can be treated generally in two to three weeks.

Insurers are required to send an advance on the payout no more than two months after the claim is lodged, with the balance following before the three-month deadline is up.
Wind damage is not considered a natural disaster and is covered by the garantie tempête part of your insurance policy.

Photo: Fred Tanneau /AFP