Municipal insurance if there are high claims

Question from Miss NOËL Sylviane (Haute-Savoie – Les Républicains) published on 10/24/2024

Ms. Sylviane Noël draws the attention of the Minister for Partnership with Territories and Distribution to the problems that more and more cities have in accessing insurance markets when their application experience is high.

As recalled in the post-mission report on local authority insurance, nearly 1,500 communities, mostly cities, are still able to insure themselves today. This situation, which has worsened in recent years, can be explained both by the worsening of climate risks and by the proliferation of vandalism such as in recent periods of urban violence .

The proliferation of these risks, which has greatly increased the loss experience of communities, represents a burden that they cannot bear due to the increase in premiums and deductible insurance. From 2023, community insurance costs have increased by 10.3%, with the majority borne by municipalities and their agencies.

This situation really puts many towns in a precarious situation. Because of the experience of high claims, some see their insurance contract terminated by their insurer, on the basis of article L. 113-4 of the insurance code. They then find it more difficult to obtain new insurance through a call for tenders, which is often unsuccessful, as the insurance market for communities is still non-competitive. Being exposed to serious financial consequences related to disasters they are not covered for, their mayors then have to insure themselves.

However, there would be a solution that would help mayors protect themselves against any termination of their insurance contract, which would include establishing a claim report listing the risks that their city open, and then choosing those for which coverage is necessary, so as to define them with the most detail possible in future market specifications.

However, small town mayors often do not have a legal department and therefore do not have the means to make a detailed record of their insurance needs. They are therefore very vulnerable to the evolution of these risks, with the risk of being abandoned by their insurer.

So she would like to know what measures the Government intends to implement to help those municipalities that cannot get insurance due to the high loss rate.

Published in the OJ Senate on 10/24/2024
– page 4155

Awaiting a response from the Ministry of Territorial Partnership and Distribution.