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Monday, April 15, 2024

Paris: one year after its launch, discounted home insurance is struggling to attract tenants

In full housing crisis, how can we better protect the approximately 700,000 Parisian tenants? While the difficulties of finding a property to rent in the capital have never been greater, this is one of the major projects carried out in recent years by the City of Paris.

To deal with this “historic” crisis, the municipality has notably taken over the competence of rent controlwith the establishment of a platform that allows tenants to check whether their rent respects the limits set by law.

But Paris is also working to test other mechanisms. A year ago, the majority announced the launch of Parisian home insurance. Insurance aimed at tenants with modest incomes and the middle class – private and social housing – with the ambition of allowing as many people as possible to have access to “quality” home insurance.

A year later, the account is not there for this system of which the City praises “the incomparable quality/price ratio” – a gain of at least 20 to 30% compared to the prices observed elsewhere. At the end of 2023, only 4,000 homes benefited from this Parisian home insurance.

400,000 households initially targeted

Still insufficient, agreed this Thursday Jacques Baudrierdeputy (PC) to the mayor of Paris in particular in charge of housing and Barbara Gomes, delegated advisor in charge of rent control and tenant protection, during a press conference in the form of a reminder.

A year ago, Ian Brossat, deputy mayor of Paris in charge of Housing, estimated that the measure could concern “potentially 400,000 households”. “For the moment, it is a commitment at a loss,” conceded Jacques Baudrier, who wishes to pass the milestone of “10,000 insured” by the end of the year. In detail, one after its launch, 50% of insurance was taken out in five districts: the 18th (10%), the 19th (13%), the 20th (14%) and the 13th (13%). Among the beneficiaries, “40 to 50%” come from the city’s social sector.

Resource ceilings reassessed

To increase the number of subscriptions, the City has decided to reassess the resource ceilings allowing a tenant to be eligible for the system. A single person will now have to receive less than 2,822 euros net per month – compared to 2,026 per month previously – i.e. a reference tax income of 33,860 euros. A couple will have to declare less than 4,217 euros per month – compared to 3,028 per month previously – or 50,605 euros of reference tax income.

To increase the number of subscriptions, the City has reassessed the resource ceilings allowing a tenant to be eligible for the system.  LP/Infographics
To increase the number of subscriptions, the City has reassessed the resource ceilings allowing a tenant to be eligible for the system. LP/Infographics

To reach a larger number of people, the Vyv mutual group, the City’s partner in this operation, has also ensured that it works on “a simple offer”, in “plain language”. The insurer also praises “simple and quick” procedures, in particular without supporting documents to be provided by the insured.

Despite a timid start, the City remains convinced of the merits of its measure. Based in particular on one figure: at least 4% of French people today do not benefit from any home insurance – even though it is compulsory. This figure would be similar to Paris, i.e. around some 30,000 tenants affected across the entire rental stock. “The housing crisis is not just about access to housing,” insisted Barbara Gomes.

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