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Changing insurance easier this month

A law allowing cancellations at any time after the first year of a contract is about to come into force

1 December 2014

A LAW making it easy to cancel and change your car or home insurance is set to come in this month.

A new rule that these common kinds of insurance (but not health mutuelles) may be cancelled at any time after the first year was part of the “Hamon Law” on consumer rights, passed in March.

However it has been waiting for a decree putting this element into action – now the government says it will come before the end of the year, to apply from the day after it is published in Le Journal Officiel, the final rubber stamp for new laws.

This is despite the insurance industry having lobbied for the measure to be put off until the spring to give more time for insurers to adapt.

Until now most contracts have been tacitly renewed each year and cancellations had to be within a set period before the annual renewal date.

This comes as rises in insurance premiums are being predicted for the start of next year, especially on home insurance, as firms try to recoup some of the expenses of paying out for natural disasters.

Financial paper Les Echos, which has been studying the trends, believes home insurance could go up by as much as 5% in some cases.

Car insurers are also under pressure, it says, notably because accidents causing injuries went up this year due to good weather and moderate fuel prices at the start of the year and more people using their smartphones at the wheel.

However it is thought the Hamon Law will rein in rises in the motor insurance sector, which Les Echos said would be only around 1-2.6% on average, as the firms try to avoid customers looking elsewhere.

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