The price of all insurance contracts will soon increase because of this new law

A new law now impacts the price of all insurance contracts: home, car, motorcycle… No one can escape it.

All households will have to pay. There is no escaping it. Indeed, the price of home, car or motorcycle insurance contracts will increase from this month of July 2024. This increase affects all French households, because taking out insurance is mandatory, whether to live in a home, own real estate or to own a vehicle. Clearly, no household will be spared from this new financial burden.

This bad news comes in an already difficult context, since insurance contracts have already undergone two successive increases in 2022 and then in 2023. In 2022, rates had jumped by 5% on average. The following year, increases varied between 5.5% and 8% for home insurance, and between 4% and 5% for car insurance, according to estimates by the Addactis firm.

These increases are mainly explained by the exorbitant costs that insurance companies have had to face, particularly due to claims linked to climate change. In 2022, they had to cover €10.6 billion in damage caused by violent weather events, a record amount in two decades, according to France Assureurs. Inflation has also pushed insurers to raise their prices, as the increasing value of raw materials inflates the cost of repairs.

However, a new increase in all insurance contracts is planned for this month, this time linked to the increase in a tax applied to all insurance contracts in France: the terrorist tax. This contribution is paid into the Guarantee Fund for Victims of Acts of Terrorism and Other Offenses (FGTI).

The increase in the attack tax is a direct consequence of the Justice Programming and Orientation Act 2023-2027. This law provides for increased compensation options for some of the most vulnerable victims, such as victims of domestic violence and minors. The FGTI, which supported 93,411 victims and paid them €516.1 million in 2023, is therefore expected to see its expenditure increase. The increase in the contribution is therefore intended to finance this new compensation.

Concretely, the terrorist attack tax has increased from 5.90 euros to 6.50 euros per year and per insurance contract since July 1, 2024, an increase of 60 cents. The French must therefore prepare for a slight increase in their insurance contracts, already undermined by the successive increases of the last two years. While this increase in the terrorist attack tax aims to improve compensation for the most vulnerable victims, it is nonetheless a hard blow to household budgets, in an already difficult economic context.



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