French Insurance FAQ
Find answers here to the most commonly asked questions on French insurance.
Do I need French home insurance?
Why do I need French life insurance / loan 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.
Why do I need French life insurance / loan insurance for my French mortgage?
The French do not believe in leaving debts behind when you go. The vast majority of French banks will require a life insurance policy linked to your mortgage and this is non-negotiable. The policy will pay off the remaining balance of the mortgage in case of death. Exceptions can include private banks who will require a cash deposit when the mortgage is taken to serve as collateral for the mortgage in case of default. The money will be invested in a low or moderate risk stocks or funds and can be recovered when the French mortgage is repaid.
Most French lenders will require that borrowers have life cover for at least 100% of the French mortgage amount.
When there are multiple borrowers this insurance can be split between borrowers, usually in proportion to revenue earned. For example, for a purchase of 1 000,000€ - 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 400,000 (40% of the loan value) and the second person for 600,000 (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.
To apply for the French "loan insurance", you must complete a health questionnaire so the insurance company can assess if you qualify for the standard 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. It's easiest to get this done in France as there are special testing centers paid for by the insurance companies in major French cities that offer tests in the same location in a very efficient way. Consider it a free medical check up which is always useful. It's also possible to do these tests in your home country.
If you have a health issue or are difficult to insure, it's usually still possible to obtain insurance however there may be a higher rate or exclusion of cover. If you are borrowing as a couple and one person has health issues, we can often negotiate a higher percent of coverage on the other person to limit or avoid paying a surcharge on the insurance premium.
When do I start paying the French life insurance?
Life insurance premiums begin around the time of your the first French mortgage payment, shortly after the signature of the final act of sale. The French life insurance company will directly debit your French bank account, normally on a monthly basis unless you specify otherwise. When you reimburse your French mortgage early, you must remember to also cancel the French life insurance.