Faced with climatic hazards, the puzzle for municipalities to insure their municipality

Faced with climatic hazards, the puzzle for municipalities to insure their municipality

Faced with increasing climatic hazards, local authorities are seeing insurers turn away. Elected officials manage on a case-by-case basis, hoping for a major reform.

Letters flow into the office of the Association of Mayors of France (AMF) every day. The same complaints come up again and again: local elected officials are finding it more and more difficult to provide for their municipality. Soaring contributions, sudden terminations of contracts or calls for tenders that remain a dead letter…

“Between 1,000 and 2,000 municipalities are affected,” speculates Alain Chrétien, vice-president of the AMF and mayor of Vesoul (Haute-Saône). “Before, we signed contracts with our eyes closed, they were tacitly renewed from year to year,” he recalls. A bygone era in the face of the climate crisis which is making insurers cautious.

Each season now has its hazard: hailstorms in spring, storms in summer, floods in autumn and winter… In 2022, the cost of the climate impact amounted to 10.6 billion euros in France for the total insurance, eight times more than in the 2000s. SMACL Assurances, one of the main insurers of municipalities, confirms having had to adapt its rates and contractual conditions and says it is “doing its best” without being able to “respond to all communities » in the face of increasing demands.

Increased risks

The consequences are difficult to bear on the ground. On the Atlantic coast, the Lanester (Morbihan) call for tenders for the “damage and property” lot was not very successful. However, the city has only suffered one major disaster in the last five years: the floor of the performance hall was unusable after a violent storm. But nothing works, the months of silence follow one another while last October the Ciarán storm threatened to cause the risk premium to jump. It was only forty-eight hours before the deadline that the mayor, Gilles Carréric, found a new insurer. If he had a narrow escape, he had to pay the price. The town hall now pays 140,000 euros per year. That’s twice as much as before.

In Roche-la-Molière (Loire), the claims rate* went into the red in 2019, when two episodes of hail damaged the gymnasium, municipal buildings and municipal employee vehicles. At 1.9 million euros in damage, the bill is heavy. Therefore, the municipality must comply with overpriced contracts. An additional cost for taxpayers? “There was no question of increasing taxes, so we had to manage the accounts differently by limiting new investments or the payroll,” reports the city councilor, Éric Berlivet, also a member of the Association of Small Towns of France (APVF).

Pushed against the wall, local elected officials find themselves facing a real dilemma and each has their own strategy. Like this elected official from a village in the Alpes-Maritimes. In this department which is increasingly hit by floods, he has chosen not to insure all the roads in his commune, due to lack of resources. If it is possible for municipalities to self-insure for “damage and property”, it is at their own risk. In the town, a landslide led to the closure of an uninsured road. It was necessary to borrow 150,000 euros, or 10% of the municipal budget.

And cautious insurers

The town hall of Avallon (Yonne) has not received any responses to its new call for tenders, neither from the historic insurer nor from any other group. At the beginning of January, when the city found itself without a contract, there was chaos within the municipal team. “Finally, we found case law that we were able to use against our insurer! The Council of State considers that the termination is suspended on the grounds that the call for tenders was unsuccessful,” explains the cabinet director, Bruno Villecourt, with strong winds against the insurers. The city therefore obtained a one-year reprieve, without having too many illusions. The problem will arise again at the end of the year. The Avallonnais hopes that a solution will be found by the State.

In the spring, Alain Chrétien, of the AMF, and Jean-Yves Dagès, former president of the Groupama national federation, will submit a report to the government. Among the first options, a three-level solution: take from the community fund for small losses (broken window, broken rearview mirror), declare greater damage (fire, for example) to the insurer and make the insurer bear responsibility for major risks to the State. “We are heading towards a paradigm shift…” predicts Alain Chrétien.

* Financial ratio between the amount of claims to be compensated and the amount of premiums collected.


10.6 Billions of Euro’s. This is the cost of the climate impact in France in 2022 for insurers.

Source: France Assureurs.

Similar Posts