How to Terminate a Home Insurance Contract in France
You would like to terminate your home insurance, but don't know if you are allowed to do so or under which circumstances you can end your contract? French law is more and more open to empowering customers and to giving them the choice to change their insurance contract easier. Nevertheless, there are some conditions to respect and some criteria to be fulfilled. In this guide, you will find the different possibilities for you to terminate your home insurance contract in France.
When and why would you be allowed to terminate your French home insurance?
You just saw a great offer at a better price for home insurance, but are already signed up to one? Or you are about to move to a different location in France? The price of your actual home insurance has increased? Or your personal situation has changed and you would like to know if you can terminate your home insurance contract?
Whatever your situation, if you want to change or terminate your French home insurance for your main house or your second home in France, hereinafter you will find the rules for the procedures to be followed.
First of all, 2 different situations exist when it comes to terminating your home insurance contract:
- Your contract has arrived at its annual expiry date: at this date, the general rules for the termination will apply.
- Your contract has not arrived at its annual expiry date yet but you would like to end your home insurance despite that. This specific situation implies strict conditions and specific rules that need to be detailed and explained hereunder.
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Termination of your home insurance on each annual expiry date
As a general rule, home insurance is contracted for the duration of one year starting from the signature date or the contractual starting date as written in the contract insurance agreement. Therefore, each insured party commits itself to stay with the same insurance provider for one year, until the first agreed expiry date.
Sometimes the first expiry date won’t be after one entire year (or twelve months) starting from the signature of the insurance agreement but may be contractually determined as the 31st December of a said year (or any other date set contractually in the particular rules).
Two different laws have been voted in order to simplify consumer rights and provide more flexibility and information to the insured parties:
- The Hamon law: the consumer who has subscribed to a home insurance provider is allowed to change his or her home insurance any time after one year of execution of the initial contract.
- The Chatel law: the insurance provider has the obligation to inform the insured parties of the upcoming annual expiry date and give them the possibility and time to terminate their home insurance contract in due time.
Termination at the annual expiry date as a general rule
Each year, at the anniversary date of the signature of the contract (or at the anniversary of the effective date as written in the insurance agreement), the insured party, landlord or tenant is allowed to terminate the contract. To do so, he or she has to inform the insurer of her/his choice not to renew the contract for another year. In case of silence, the contract will be renewed for another new year, until the next annual expiry date.
Therefore, you are allowed to terminate your home insurance contract each year at the annual expiry date as written in the contract (do not forget to check the date written in the particular rules as it may be different from the date you signed the contract).
To terminate your contract, you have to send a termination notification to your insurer 30 days before the annual expiry date. The effective date of termination will be one month after your insurer has received the notification of your choice to terminate your contract.
The previous information is part of the general rule, but as said, some specific regulations have been voted and have entered into force to strengthen consumer rights.
Termination according to Chatel Law
In 2005 a first specific rule, called the Chatel Law came into effect and has since then changed the French Insurance Code. This specific modification has added new protections for the insured parties by changing the automatic and tacit renewal of home insurance from one year to another. Since summer 2005, insurers have to notify and inform the other party (meaning the insured party) of her or his right to decide not to renew the insurance agreement.
- The insurance provider shall send a notification to the policyholder describing the right to terminate the contract and explaining in detail the specific date that should be observed.
- This notification shall be sent as soon as 3 months before the annual expiry date, and at the latest 15 days before the last date allowed for termination.
Since then, any renewal has to be brought to the attention of the insured party in order for her or him to have time to decide if she or he wants to be committed for another year of insurance.
Termination according to the Hamon Law
In 2015 another specific rule, called the Hamon Law came into effect in the insurance field in order to provide more rights to consumers. Since then, all consumers who are part of a home insurance contract can decide, after one year of execution of the contract, to terminate the said contract. Moreover, this right of termination is open any time after the first annual expiry date without any fee or penalty.
Therefore, you commit yourself to stay for one year with the insurance you subscribe to and after the first year, if there is any other better offer or any better price with another insurer you find and wish to opt for instead, you are allowed to notify your initial insurer of your desire of termination. You will only need to send a 30-day notification to your insurer before the termination can become effective.
The insured party has to pay for only the period of insurance during which he or she is insured. Therefore, the insurer has to reimburse the insured party for the period after the termination, if the premium has been paid annually.
Termination of your home insurance at another date than the annual expiry date
French law allows the insured parties to terminate their home insurance contract any time after the annual expiry date if some specific conditions are fulfilled. All these specific situations are described and written in the general and particular rules of the specific home insurance contract.
- Outside the annual expiry date, you can terminate your home insurance if:
- The insurance provider decides to increase the premium of your insurance,
- Your personal situation has changed since the signature of the insurance contract,
- You decide to terminate one contract from a group of contracts you have with the same insurance provider,
- The house/apartment you insured has disappeared or has been sold,
- Damage risks have increased or decreased,
- The insurance provider does not respect the rules stated in the Chatel Law and does not notify you of the right to terminate your contract at the annual expiry date
The insurance provider decides to increase the premium of the insurance
Each year, at the annual expiry date, the insurance provider is allowed to decide on an increase of the premium of your home insurance. The insurer is also allowed to increase the deductibles that may apply in case of damage.
The insurer is obliged to inform you of the said increase, giving you the choice to either renew the contract for another year or to decide to terminate the contract. Therefore, the fact that the insurer decides to increase the price of the insurance opens the opportunity for you to terminate the contract if the new price does not suit you. It is a modification of the initial and essential conditions of the contract that allow you to terminate the agreement. If you decide to terminate the contract, you have to notify the insurer within 1 month after you have received the increase premium notification.
The contract will be terminated 30 days after the insurer receives your written notification by registered letter.
Your personal situation has changed since the signature of the insurance contract
Some specific events may lead the insured party to need to change both their home insurance contract and provider. All the conditions that may allow you to terminate your home insurance contract have been determined by the law and are listed in Article L113-16 of the French Insurances Code. These conditions are as follows:
- A change in your residency,
- A change in your marital status,
- A change in your matrimonial property regime,
- A change in your profession,
- A retirement,
- The termination of your professional activity.
In order to be able to benefit from this change to terminate your home insurance, you have to notify your insurance provider within 3 months of the change by registered letter. You will have to provide your insurer with all the applicable written proof explaining and proving the change. After that, the insurance agreement will be terminated within one month of the letter being sent.
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You decide to terminate one contract within a group of contracts you have, with the same insurance provider
When you have several contracts with one insurer, if the insurance provider decides to terminate one of these contracts, you will have the right to decide to terminate all or part of the other contracts.
As an example, you have car insurance and home insurance with the same insurance provider. If the insurer decides to end your car insurance, you are then allowed to notify your choice to also terminate the home insurance contract. In all cases, the termination also needs to be sent by written registered letter.
The home you have insured has been destroyed or has been sold
If you decide to sell the insured house or apartment, you have to notify your insurance provider by written registered letter if you decide to transfer the insurance contract to the new landlord or if you want to terminate the contract.
If the home insurance contract is still effective on the day of the sale of the property, the agreement is transferred onto the new owner.
If the property has been destroyed in an accident that is not covered by your insurance, the insurance agreement will be terminated automatically. The termination will be effective at the date of the loss.
The perceived risks have increased or decreased
Some specific events may lead to a decrease in perceived home hazards and risks, such as:
- A fireplace has been removed,
- Part of your property has been sold,
- One of your children has left home.
In such cases, regarding the decrease in risk within your home, you are entitled to claim a decrease in the price of the premium, or you can ask for a termination of your home insurance contract.
On the contrary, some other specific events may increase the risk in the home insured, such as:
- Having a swimming pool installed in your garden,
- Some big improvements and changes have been made in your building and property, like installing a fireplace, extending a part of the home…
In such cases, you have to inform your insurer of the changes by written and registered letter. As a consequence, the insurance provider will be allowed to:
- Terminate the contract within 10 days, if it is not willing to cover this new risk,
- Offer you a new contract and new conditions regarding the change of situation that just occurred in your life, usually entailing a raise in price. If so, you are entitled to decline the offer and your home insurance contract will be terminated. This said, the good news is that you are then allowed to look for new offers and find a new insurance provider with a better offer!
How should you terminate your home insurance?
If you want or have to terminate your home insurance, you have to follow the specific conditions provided by your insurer and described in the contract. In order to have proof of what you send, make sure to always opt for a written and registered letter. This letter has to be sent to the specific address indicated in the insurance contract. You will also find the address inside the general conditions or online on the website of your insurer.
Your new home insurer may be able to help you or even handle the whole process of termination and change of insurance for you.