Los Angeles wildfires: what if it had happened on the Côte d’Azur?

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Publié le 24/02/2025 par Jérôme Goy

INSURANCE LAW

50 billion dollars worth of damage, 12,000 buildings burned, 180,000 people evacuated, the Getty Museum’s collection threatened,… and as if that weren’t enough, could the bears, that had taken up residence in a Californian house abandoned by the victims, had exacerbated the damage ? If California were the Côte d’Azur and the Californian administration were the French administration, what would be the consequences in French insurance law for a similar catastrophe ?

With regard to fire insurance contracts in France, the Insurance Code provides that “the fire insurer is liable for all damage caused by conflagration, flashover or simple combustion”. This is an obligation for tenants, although fire insurance is often included in multi-risk home insurance policies, unlike landlords who are free to choose not to insure.

In practice, in the event of fire, the insured must:

1. declare the loss to his insurer;
2. take the necessary measures to limit damage to the insured property;
3. submit a “statement of loss” to the insurer, including an estimate of the property destroyed or damaged.

The insurer may also appoint an expert to estimate the amount of damage resulting from the fire.

In the event of a catastrophic fire on the Côte d’Azur, victims can benefit from the Catastrophes Naturelles regime if a ministerial decree officially recognizes the state of natural disaster and is the property is effectively insured against the risk of fire at the time of the loss. In such cases, the Caisse Centrale de Réassurance (CCR), now Arundo, assumes the costs of this exceptionally high risk. While the applicable deductible is usually stipulated in the insurance contract, in the case of natural disasters, the amount is set by law. It amounts to €380 for homes and personal property, and “10% of the amount of uninsurable direct material damage suffered by the insured, with a minimum deductible of €1,140” for business property.

The special case of local authorities

Insuring public property against the risk of fire is a real issue in this case. Neither the State nor local authorities are required by law to insure their property.. Very often, the latter will choose to self-insure and cover the cost of claims compensation from their own budgets. If they are not insured, local authorities and the State can rely on the Fonds de Prévention des Risques Naturels Majeurs (Barnier Fund), financed by deductions from “natural disaster” premiums on home and car insurance, as well as the Fonds pour la Réparation des Dommages Causés aux Biens des Collectivités Territoriales when the “public calamity” affects a large number of communes or the amount of damage exceeds 6 million euros.

Moreover, the December 30, 2022 reform of the deductible calculation methods applicable to local authorities poses a practical issue. The deductible applicable to direct material damage corresponds to the highest of the following three values: the maximum deductible stipulated in the contract, a fraction of the damage fixed by decree, or an amount determined according to the phenomenon by a joint ministerial decree. This method of calculation, which came into force on January 1, 2024, has already been contested by some local authorities: a commune that suffered flooding in October 2023 had to pay a deductible of 2.5 million euros, even though the damage had been estimated at 2 million euros. We can only imagine the deductible amounts applicable to our hypothesis…

Forest fire insurance

In France, only 9% of forests, mainly privately-owned, are insured against the risk of fire. In the absence of compulsory insurance, there are three points to bear in mind for forest owners:

1. the French government only covers clean-up and reconstruction work in the event of storms;
2. article 352-1 of the French Forestry Code establishes a tax-advantaged forestry investment and insurance account (CIFA) for individuals and groups who own forest land and have taken out fire insurance;
3. the Centre National de la Propriété Forestière (CNPF) brings together forest owners to pool risks and costs in the event of fire or other disasters.

Insurance for damage caused by wild animals following a fire

On the Côte d’Azur, there are no bears (yet)… but there are plenty of wolves. Would the Californian lawmaker have the audacity to compensate victims of bear damage in the same way that our welfare state guarantees shepherds against damage caused by wolves that have devoured their livestock?

The wolf is an external and autonomous element in the disaster, so there is no causality between the wolf damage and the fire damage , hence the absence of compensation.

For the record, the French welfare state is far more far-sighted (and paper-intensive) than the Californian one. In France, it is therefore possible to:

1. include a clause specifically covering this claim in the shepherd’s multi-risk homeowner’s policy;
2. take advantage of the “Plan Loup” for compensation for damage caused to flocks;
3. obtain “repair or replacement of damaged farm equipment and buildings” on the basis of decree no. 2019-722 of July 9, 2019, if you are a farmer whose herds are located in territories where wolves, bears or lynx are present, and on condition that they have been subject to reasonable protection measures or are recognized as unprotectable. A claim for compensation must then be submitted to the prefect within 72 hours of the damage occurring, so that an agent trained by the Office National de la Chasse et de la Faune Sauvage can draw up a report triggering the allocation of compensation…