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With the cost of living rising, many French are looking to reduce their monthly expenses. Some are considering stopping paying their insurance premiums… a very bad idea!
Save money by no longer paying for car or home insurance, does the idea seem extravagant to you? However, a quarter of the French would be ready to take the plunge to save money. However, the consequences of this decision can be disastrous. There are other solutions to save money on this expense item. Between the risk of no longer being insured and alternative solutions, here are the elements you need to know.
What happens when you stop paying for car or home insurance?
For the most part, insurance companies choose to apply the principle of the right to make mistakes in monthly payments, which applies to the vast majority of insurance contributions in France. In other words: the first non-payment does not lead to any special procedure, but simply a postponement of this deadline until the next one. On the other hand, the situation differs if the unpaid leave is renewed a second time. At this point, the insurance company initiates a procedure, the operation of which is regulated by the Insurance Act.
First step: An opening letter is sent by registered post to the insured who has not paid. A period of 30 days is given to regulate the situation and make the payment. If no payment is registered by the company during this period, the insurance company suspends the guarantees given under the contract for 10 days before the auto or home insurance is finally terminated. The property is therefore no longer covered by an insurance agreement.
Good to know
: Before sending the initial opening letter, some insurance companies send an information letter or a pre-formal letter, which extends the time available to regulate the situation. At MAIF, this letter is invoiced for 7.10 euros.
Also read: Car insurance: are you covered by your contract in the event of a fuel shortage?
No more insuring your car or house, a (very) risky decision
The president of the association to help people in financial difficulties Crésus, Jean-Louis Kielh, explains: “We see an acceleration in the rejection of insurance”. But saving money by stopping paying insurance premiums is in many ways a very bad idea. Insuring your vehicle and your home are legal obligations, with the exception of owners who are not required to take one out (if they are not in a condominium).
Driving without car insurance is thus an offence, subjecting the driver to 10 years in prison and a fine of 3,750 euros. If you don’t insure your vehicle, it actually affects not only the driver, but all other road users in the event of an accident. Thus, injuring a third party or damaging another vehicle while you are uninsured can be extremely expensive, not to mention the associated criminal penalties.
To save money, it is better to take stock of your insurance
A tedious operation, taking stock of your insurance coverage is nevertheless THE best way to save money. The goal? Detect possible duplicates between its various contracts, thereby removing certain guarantees, or even certain contracts that do not make sense. Jean-Louis Kielh, testifies: “We receive people who are insured five times for the same thing, and who at the same time no longer manage to put food in the fridge”.
At the same time, it is possible to obtain offers from other insurance companies to verify that the price of their contracts is in line with the rest of the market. If this is not the case, it is possible to change the insurance company for your car or home insurance at any time, provided that the contract in question is more than a year old. An operation that also applies to mutual health insurance. Other contracts, on the other hand, must be terminated on the annual expiry date, often 1 January, especially the insurance, death, burial or life accident guarantee.