First victims of natural disasters and… first victims of the increase in the price of insurance which covers the damage. This is the harsh reality which was announced in the Official Journal this Thursday, December 28, 2023. The “Cat Nat” tax, present on home and automobile insurance contracts, and which is used to finance the natural disaster compensation system , will experience a substantial increase on January 1, 2025. The premium rate will increase from 12% to 20% for home and professional property insurance, and from 6% to 9% for automobile insurance. This represents 16 euros more on average for home insurance, estimates France Assureurs. To justify this increase, Bercy mentions a deficit compensation scheme since 2015 to the tune of 1.9 billion euros. Concretely, in the event that a municipality is recognized as being in a state of natural disaster, the public-private regime compensates the victims, in equal shares between private insurers and the Central Reinsurance Fund, 100% owned by the State. The “Cat Nat” regime, created in 1982, has not been revised upwards for 25 years.
Exploding costs due to climate change
“The Cat Nat regime is facing a structural increase in the frequency and intensity of natural disasters – droughts, floods, earthquakes, cyclonic events, landslides –indicates the Ministry of the Economy and Finance in a press release dated December 28, 2023. Gold, the contributions collected for this plan have not been reassessed for almost 25 years. This growing imbalance threatens the sustainability of coverage of the Cat Nat scheme, in a context of need to adapt to climate change.” Ensuring we can continue to cover the damage caused by natural disasters rather than preventing them by committing to the fight against global warming is a choice that raises questions. However, the need for compensation for victims no longer needs to be demonstrated. In 2023, 2,056 French people were victims of natural disasters according to the Permanent Observatory of Natural Disasters, for a total cost of more than 9 million euros.