French Insurance FAQ
Find answers here to the most commonly asked questions on French insurance.
Do I need French home insurance?
Do I need life insurance for my French mortgage?
When do I start paying the French life insurance?
Do I need French home insurance?
When you have a French mortgage for your French property, the lending bank requires you to have a home insurance policy to cover damage and loss for your property. If your property is an apartment, the common areas of the building are covered by another policy taken by the “co-propriete” or owners association. You are still required however to insure your private part of the building.
For existing or new build French properties, the French home insurance policy must be in place before you complete the act of sale with the French notaire. It is technically illegal for the French notaire to sign a transaction for an uninsured property.
The cost of home insurance is quite reasonable in France and the policy can be put in place quite quickly, within a day if necessary.
Do I need life insurance for my French mortgage?
The French do not believe in leaving debts behind when you go. All French banks will require a life insurance policy linked to your mortgage. The policy will pay off the remaining balance of the mortgage in case of death.
When there are multiple borrowers this insurance can be split between borrowers, usually in proportion to revenue earned. For example, for a purchase of 200,000€ - if one person in the couple earns 40,000 and the other person earns 60,000, the life insurance coverage could be split 40% - 60%. The first person would be covered for 80,000 (40% of the loan value) and the second person for 120,000 (60% of the loan value) in case of death. If the first person died in this case, 40% of the remaining balance of the mortgage would be reimbursed. This is the minimum coverage required. Some clients prefer to have 100% insurance on each borrower so that the entire remaining balance of the mortgage is repaid in case of death of either party.
Most French banks offer a group negotiated life insurance policy that is often the least expensive option. To apply for the life insurance, you must complete a health questionnaire so the insurance company can assess if you qualify for the standard group rates or if you would have any health issues that could merit an increase in the insurance premium. Any serious health issues must be declared at this time to ensure a payout in case of death.
Usually the health questionnaire is all that is required however for larger mortgages (over 200,000 euros), you may be required to do a blood test, urine test and electrocardiogram. This is standard for all borrowers in France, residents included, and there are special testing centers paid for by the insurance companies in major French cities.
If one person in the couple has a health issue or is difficult to insure, we can often negotiate a higher percent of coverage on the other person to avoid paying a surcharge on the insurance premium. It can also be possible to obtain a mortgage without life insurance in some cases such as if your down payment is at least 40% or if you are willing to pay a slightly higher interest rate.
When do I start paying the French life insurance?
Life insurance premiums are charged either with the first French mortgage payment but often as soon as the bank receives your accepted mortgage offer. Do note that this is before the actual completion of the act of sale with the notaire. The French life insurance company will directly debit your French bank account, normally on a monthly basis unless you specify otherwise. If you reimburse your French mortgage early, you can cancel the life insurance.
