House insurance: Being under insured and some facts

It often comes as a surprise to some people that when they want a quote for their house insurance, I ask to come and visit it. If it is too far, I asked them for a complete description of the house. This is because in France, you are insured in accordance to the number of rooms you have and not on the value of the house. So, I will explain how the contract works and what are the consequences of being under insured.

• How do you count the rooms: In France, your insurance company will ask you how many “pieces” you house has. What count as rooms (pieces) are bedrooms/ living room/ dining room/offices/mezzanine/verandas that are over 9m2 (with Allianz). Bathrooms, toilets, kitchen, landing, corridors are not counted as rooms. Rooms over 40 m2 counts as 2 rooms!

Kitchen that have a separation like a bar or if only half the room is kitchen and the other half if dining room could count as one room. To make sure of what count as rooms, better check the “Dispositions Générales” of your contract. This is the booklet that comes alongside your contract (Dispositions particuliéres) and you would have description of what the rooms are (written in the first few pages under definitions “pieces”).

• What happens if you are not insured for the right number of rooms: In these circumstances, the insurer may choose to « apply average » to the claim under an « average clause ». This means that where the number of rooms insured is inadequate, the insurer can reduce its liability for a claim by applying a proportionate approach. The sum to be paid out is usually calculated as follows:

Basically, it means you get less money for your claim! That is why you should inform us when you do some renovation work on your house.

• What are you insured for: Fire, damage caused by a vehicle (plane, space craft or meteorite!), theft, vandalism, terrorism, natural and technological catastrophy, water damage, electrical damage, Storm-snow-hail damage, glass breakage and public liability. Those are the basic guaranties on house insurance contract. Note that each company is different so check your booklet. For instance, with Allianz, if a car hits your fence and does not stop, we cover it. Most companies do not cover it if the guilty party is not identified!
• Chimney: If you have a wood burner, insert or fireplace, you must inform your insurance company. Yes, it increases the premium as it is an extra risk of fire. Inserts are the riskiest. You must also inform the company if the wood burner or insert was installed by a professional (send copy of invoice). It reduces the premium if so. Not all insurance companies want proof of chimney sweep but some do. We don’t!
• Content: The house and content is on the same contract in France. Content is movable things. So, imagine you are moving to a new house, it is the value of everything you put in the removal truck. Equipped kitchen is part of the house. Being insured for 100 000 euro does not mean you will get that if the house gets burned down so make sure you are covered properly. Yes, amount of content affects the premium.
• Valuables: Valuables are jewelry and precious metals and stones. With Allianz, for a furniture to be classed as valuable, it has to be worth more than 8000 euro. But depends on the company so check definitions on the booklet. Valuable objects are not covered in holiday houses during your absence.
• Theft: To claim for a theft or robbery, we need a police report. Padlocks are not recognized by insurance company as locks so anything stolen that was protected by a padlock is not covered for theft. You can opt to have personal items covered for theft outside your house but it’s an option so ask for it to be added to your policy (up to 1500 euro with Allianz). Loss is not covered! Cash is not covered either.
• Outbuildings: If you have a garage or a barn, etc., it is insured under the same contract as the house. It is measured by the surface on the floor (walls included). There is a limit of cover for content inside outbuildings so check your booklet. With Allianz, it is up to 1500 euro. Can be increased to 4500 euro as an option.
• Business: If you use part of your house for business (gîte, chambre d’hôte, hairdressing, beauty, etc.) you must inform your insurance company as there is a professional insurance for that and the professional material is not covered under house content.
• Garden: It is a house insurance contract so if you want garden things like pergolas, Spas, barbecue, garden furniture etc. to be covered, it’s optional! Pergolas must be fixed to the ground to be covered. Same if you want trees to be removed in case of storms or your outside water pipes covered for leaks.
• Storm: For a storm to be officially recognized, the wind must blow higher than 100km/h and loose garden furniture is not covered so bring it in if a storm is coming!
• Holiday house: You must turn off the water in winter and don’t forget to drain it as toilets can freeze and break and would then not be covered fully. You must also shut the shutters and get someone to check the house regularly. Some insurance companies don’t cover theft on holiday houses if you don’t have shutters (not Allianz).
• Lack of maintenance: Insurances do not cover if the damages come from a lack of maintenance so if you have a decrepit barn or roof and it collapses, insurances won’t pay!
• New for old: With Allianz this option is automatic but New for old does not mean you get new for old! You only get new for old is the wear and tear of the house/objects covered is less than 25%. If it is more, you will have to cover the loss above 25% yourself. Egg: The roof is 35% wear and tear and it cost 10 000 to repair, then 10% so 1 000 is left for you to pay. Check your contract as it depends on each insurance company.
• New for old for electrical damage: You can add an option so that in case of electrical damages, the electrical equipment is replaced by new. It only works if the equipment is less than 10 years old (with Allianz). It is different with other companies (check the booklet).
• Renewable energy: If you have solar panels or geothermic heating or anything to do with renewable energy/ecology, it’s an option so you must inform your insurance company otherwise it won’t be covered.
• Options: There are loads of them: Swimming pool, garden cover, horses, electrical damages, new for old, extra cover for outbuildings, outside water pipes and septic tank, renewal energy equipment, theft cover outside the house, etc.

You must think this is a bit heavy reading (and I agree) but note that all of us have the famous booklet “dispositions générales” in our office so we can check whether a claim made by a customer is covered or not or what are the limit of guaranties. The Allianz booklet is 81 pages long! So, we can’t remember it all. Mine is in my bag and when someone asks me if this is covered or not, I double check with it!

Some of you only look at the premium of your insurance, but you can’t just stop at this. Banks are the first one to give you quotes stating it is the same cover but it’s probably not! As my husband always says, buy cheap buy twice!

And remember to check out our web site www.bh-assurances.fr/en for all my previous articles (“practical information”) and register to receive our monthly Newsletter.  You can also follow us on Facebook: “Allianz Jacques Boulesteix et Romain Lesterpt”

And don’t hesitate to contact me for any other information or quote on subject such as Funeral cover, inheritance law, investments, car, house, professional and top up health insurance, etc…