06 October 2010

Insurance business

Food, taxes, medication. Three things that are inevitable in this life. Well, and insurance too, if you own property. Yesterday I had to deal with all these things.

First, it was time to get our homeowner's insurance up to date. The way such insurance is calculated in France is interesting. It's not based on the size of your house in square meters (or square feet) — at least not entirely. It's not based on the value of the house — what you paid for it, or what you might be able to sell it for. It seems to be based entirely on the number of rooms your house has in it.

Not all the rooms count, however. The kitchen, for example, is ignored. So is the toilet (which is usually a separate room in France), and so is the bathroom. You could have as many WCs and bathrooms as you want, and their existence would have no effect on your homeowner's insurance. The same is true of the utility room, which in our house is a big semi-finished space containing the boiler, a shower stall, a laundry sink, the washer-dryer set, and three big wardrobes full of linens, clothes, and other stuff. It's as big as our living/dining room. All that is ignored, as is the garage. The stairs. The hall. The landing.

The rooms that count are bedrooms, living rooms, and dining rooms. Our house, therefore, was determined to have just three rooms — two bedrooms and the living/dining room. I repeatedly told the women at the MMA insurance agency in Saint-Aignan that we also have a room downstairs that is officially an entryway, but that is at least as big as either of the bedrooms. They weren't interested in that information. Or in my description of it as my home office, where I (used to) have my desk and computer. (Now I've moved upstairs.)

MMA (Mutuelle du Mans Assurances) doesn't care. No matter that the downstairs entryway is the size of a standard room, and besides my desk and computer, at the time I had a day bed for overflow visitors down there, as well as a television set and stereo. A telephone. A filing cabinet. Non of that fazed anyone at MMA. That space did not exist for insurance purposes — even though it is nearly as big as some of the Paris apartments I lived in back in the 1970s and 1980s.

Okay, MMA does say (and our previous insurer, Axa, also said) that our living/dining room has to be counted as two rooms because it is more than 40 square meters (440 square feet) in size. That meant our house insurance premium was based on the house having four rooms. Even so, less than half our total living space is what the homeowner's insurance is based on.

Oh, and did I mention that our policy — covering replacement value, liability, fire, weather and water damage — costs just 239 euros a year? That's $330 U.S. annually, even with today's low dollar. Our homeowner's insurance in San Francisco used to cost four times as much, and that was without earthquake coverage.

The new upstairs space we had finished off this year, the loft or attic that is now a bedroom suite, obviously needed to be figured into MMA's premium calculation. We got permission from the village authorities to have the construction work done, and one of the pieces of paper they handed us at the mairie was a form on which we were supposed to declare that the construction work had been finished in conformance with the initial plan, once it was actually finished. I took that paper to the village hall last week and got it stamped, to make it official. The work is officially done.

I took a copy of the completed document — Achèvement des travaux, it was called — which the woman at the town hall was nice enough to provide, to the MMA office in Saint-Aignan the other day. I don't know what I was thinking the new insurance premium would be. How much would it cost to include the new room? And in fact, it would count as two rooms, because it is also larger than 40 square meters. The new insurance quote would have to be based on six rooms, not four.

The young woman in the MMA office entered the information into a program on her computer that calculates the premium you have to pay. She couldn't get it to come out right, so a more experienced colleague came over and figured it out. I was sitting there thinking that the new premium must be so high that the woman couldn't believe it. Two rooms plus two "double" rooms. Six rooms... Is that too many?

No need to worry though. The new annual premium will be 269 euros ($372 U.S.), the MMA people said. That's a 30-euro annual increase. And since there are eight months left in the coverage year — two-thirds of the year — we were asked to pay two-thirds of the increase, or 20 euros, right now, to be fully covered until next June 1. I guess I can live with that.

Tomorrow: health insurance premiums. In other words, taxes.


  1. Can I just clarify that the premium is to insure the building and the contents? If so, it is very reasonable.

  2. Wow, that is incredibly low.

  3. I long ago gave up trying to understand insurance companies. Here in the UK they have the habit of encouraging new customers with low rates and making up for it by relying on the inertia of existing customers and hoping they won't notice their rates being hiked extortionately - and no "no claims" bonus or discount. Result: an endless churn of paperwork and pointless online activity. But I recently moved from a renewal of around £450 (for contents insurance) to a new policy at £150. Barmy.

  4. That's very low indeed. But then of course there is little risk of flooding/water damage as you're not close to the river. And does it include theft/burglary? Martine

  5. Interesting- je me demande why our insurance costs are so much more?

  6. What a great insurance rate. We pay $1,488 per year, with a $1,000 deductible.

  7. Taxes:
    Have you seen this ?


    Un sujet qui fâche but I guess that as an American you are experiencing it ... Wonder what CHM thinks

  8. That sounds very reasonable - a real bargain. So long as the rooms they don't count are covered if you need to make a claim.

  9. Andrew, yes, the coverage is for house and contents. The contents are insured up to 120,000€ — more than $150K at current exchange rates.

    Starman, seems low to me too but from what I know about other policy-holders' properties and policies, it's in line.

    Autolycus, I will definitely keep an eye on the rates. At MMA rates are lower than what I had been paying to Axa.

    Hi Martine, yes, coverage includes « Vol, tentative de vol, et vandalisme » — theft, attempted theft, and vandalism. The policy also specifies that appliances will be repaired if possible or replaced with new ones. And the contents of the fridge and freezer are covered too. You are right about flooding — we don't have much to worry about up on this hill. But I don't remember being asked if our house was in a zone inondable.

    Evelyn, who knows? The cynic's view is that insurance is a racket, no?

    Diogenes, that's about what we paid in San Francisco. I haven't looked into our deductibles with the MMA policy, but I read this morning that there is no overall deductible. Specific clauses include deductibles, apparently. More research to do.

    Beaver, I hadn't heard about that, but I of course wouldn't be affected. CHM might; maybe he'll chime in. U.S. expats are already taxed by our federal government.

    Jean, I hope so! Since water damage is covered, I assume kitchen, WC and bathroom would be covered by the policy. I don't see how they could insure part of the house only. I should ask that question next time I go see the MMA people.


What's on your mind? Qu'avez-vous à me dire ?