poor workmanship better compensated when the insurer goes bankrupt

Compensate individuals more broadly in the event of the bankruptcy of their property and casualty insurer: this is the objective of article 159 of the finance law for 2022, promulgated on December 30, 2021.

A 2017 ordinance already allowed victims to be compensated by the Compulsory Insurance Guarantee Fund (FGAO), but only for contracts concluded from July 2018. The new measure corrects this defect and all current contracts are now concerned, in particular those taken out with players such as CBL Insurance, Elite Insurance, Qudos Insurance, Alpha Insurance or even Gable Insurance, which are in the process of being liquidated.

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This expansion is good news for policyholders. In fact, in the event of major defects in a recently constructed or renovated building, the structural damage insurance finances the repairs while waiting for responsibilities to be established. Its subscription is compulsory during a construction site or within the framework of important works such as an extension, an elevation or a renovation of the shell.

10,000 to 15,000 potential beneficiaries

For example, when a house is rendered unusable because it has a lot of cracks or leaks, the insurer will finance the repairs so that the housing is habitable quickly.

Purchasing this insurance generally costs between 2,500 and 5,000 euros, but in recent years, cheaper companies, generally based abroad, have attracted part of the public. “Insurers registered in a country of the European Union can indeed cover risks located in France with the authorization of the regulatory authority of their country of origin, they are not subject to the control of the Supervisory Authority. prudential and resolution (APCR) which protects banking and insurance customers ”, regrets Olivier Baylot, associate lawyer at the Gobert law firm, which created a group of construction insurance victims.

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These foreign companies misjudged the financial sums necessary to cover claims related to French damage insurance and went bankrupt. “This has resulted in catastrophic situations, with people who have invested the savings of a life in their house and who cannot live there or live there in very degraded conditions”, hammers Me Baylot.

In total, between 100,000 and 200,000 people would be affected by these bankruptcies, according to the French Insurance Federation (FFA), and the expansion of the FGAO’s intervention would concern between 10,000 and 15,000 additional people. These wide ranges are explained by the fact that these insurances cover claims over a period of ten years and that declarations can be made throughout this period.

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