(Photo credits: © H_KO – stock.adobe.com)
With the cost of living rising, many French people are looking to reduce their monthly expenses. Some are considering stopping paying their insurance contributions… 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 French people would be ready to take the plunge to save money. However, the consequences of this decision can be disastrous. Other solutions exist to save money on this item of expenditure. Between the risks of no longer being insured and alternative solutions, here are the elements to know.
What happens when you stop paying for car or home insurance?
Most of the time, insurance companies choose to apply the principle of the right to error for monthly payments, which concerns the vast majority of insurance contributions in France. In other words: the first non-payment does not lead to any particular procedure, but simply a postponement of this deadline to the next. On the other hand, the situation differs if the unpaid is renewed a second time. At this time, the insurer initiates a procedure whose operation is regulated by the Insurance Code.
First step: a letter of formal notice to pay is sent by registered mail to the insured who is in default of payment. A period of 30 days is granted to regularize the situation and make the payment. If no payment is recorded by the company during this period, the insurer suspends the guarantees granted by the contract for 10 days, before definitively terminating the auto or home insurance policy. The property is therefore no longer covered by an insurance contract.
Good to know : before sending the first letter of formal notice, some insurers send an information letter, or pre-formal letter, which extends the time available to regularize the situation. At MAIF, this letter is billed at 7.10 euros.
Read also: Car insurance: are you covered by your contract in the event of a fuel shortage?
No longer insuring your car or house, a (very) risky decision
The president of the association for helping people in financial difficulty Crésus, Jean-Louis Kielh, explains: “We are seeing an acceleration in the rejection of insurance”. However, saving money by ceasing to pay insurance premiums is a very bad idea, in many respects. Insuring your vehicle and your accommodation are legal obligations, with the exception of owner-occupiers who are not required to take out one (if they are not in a condominium).
Thus, driving without car insurance is an offense that exposes the driver to 10 years’ imprisonment and a fine of 3,750 euros. Indeed, not insuring your vehicle does not only concern the driver, but all other road users in the event of an accident. Injuring a third party or damaging another vehicle while you are not insured can thus 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 different contracts, and thus remove certain guarantees, or even certain contracts, which do not make sense. Jean-Louis Kielh, testifies: “We receive people 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 request quotes from other insurers in order to verify that the price of its contracts is consistent with the rest of the market. If this is not the case, it is possible to change insurance company at any time for your car or home insurance, provided that the contract in question is more than one year old. An operation also valid for mutual health insurance. Other contracts, on the other hand, must be terminated on the annual expiry date, often on January 1, in particular the insurance, death, funeral or the guarantee of the accidents of life.