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France - Insurance
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If you live outside of the EU area, then you will have to provide suitable health insurance before you are allowed a visa to live and work in France. For those who are EU citizens there is no need for a visa to live and work in the country and health insurance was at one time not needed. However, this is no longer the case.
France has two different types of life insurance, Assurance vie and Assurance décès. Assurance décès are policies which pay out upon the death of the policy holder. Assurance vie are policies that are more used as schemes for saving money for those that are living. Inheritance tax benefits apply on both of these policies.
Persons can leave an amount up to €152,500 before their beneficiaries become liable for inheritance tax. Over this amount tax becomes payable at 20%. It is possible to leave a life insurance policy for more than this amount without it becoming liable for tax, as the limit is calculated per person and not on the entire sum of the estate. Therefore there can be several beneficiaries all receiving up to €152,500 without having to pay any tax at all. Certain beneficiaries, such as the husband, wife or civil partners are not eligible to pay inheritance tax on any life insurance policies. However, life insurance policies cannot be excessive when compared to the policy holder’s lifestyle. This is to prevent a large policy with high premiums being taken out close to the end of someone’s life to reap the benefits of the generous inheritance tax policy.
As an expat looking to move to France and maybe take up French residence status then any existing life insurance policy, no matter how large will not be subject to the French inheritance tax laws, as long as the policy holder is under the age of 70.
Taking out an insurance policy such as the Assurance vie is good for several reasons. You can receive a return on your investment that is often higher than any interest received through a bank or other savings account. You can also make withdrawals from your investment throughout the life of the policy and the taxable rate of your investment is usually much more favourable than with standard savings schemes.
Home insurance in France is compulsory. If you are buying a home in France you will need to have home insurance in place prior to signing the final act and completing the purchase of your home. This is a legal requirement whether you are buying the home as a buy-to-let, as a holiday home or as a full time residence for yourselves. Most of the buildings cover policies in France are known as ‘Multi Risk’, which means they will cover for many things including natural disasters. Not all policies, even multi risk policies cover the same things so it is wise when taking out the policy to clarify exactly what you will be covered for.
All French home insurance policies start as a basic package which consists of third party liability. If additional cover is required on top of this then the insurance companies can arrange a tailor made policy to suit your needs. You can keep just a basic policy if you wish, but if you are letting out the property either as a whole or in part, for example renting out rooms in the summer season, then you will have to advise your insurance company of his fact otherwise any damages occurred may not be covered no matter which policy you choose.
House insurance in France is based on the size of the home and how many rooms there are. This means that if you remodel the home, add or reduce the number of rooms then the insurance company must be made aware of the fact. Even the addition of a simple conservatory or enclosed terrace can cause problems for future claims.
French home insurance also varies depending on the type of home you have. Older homes or those homes that have not been built to recent regulations should have a valuation done by an expert. Newer built homes that comply with the set standard do not require this valuation.
All homes need to have a separate contents cover policy as in the UK. Unlike the buildings cover this is not a compulsory insurance policy. It works just as in the UK where you choose what level of cover you require, but any special or particularly valuable items such as pieces of jewellery will need to be insured separately and a valuation of these pieces will be needed.
The law in France states that driving without valid car insurance a criminal offense. In France, if you are caught driving without insurance this is punishable by 6 months in prison. French car insurance has three basic packages as does the UK system, Third Party, Third Party Fire and Theft and Fully Comprehensive. All cars, even those off the road need to have a minimum of third party cover to remain legal.
Professional Liability Insurance
The professional liability insurance needed will depend on the type of business you are operating. Retail outlets will need different cover to those in the building trade. The building trade will need cover not only of accidents at work, loss of tools through theft or damage, public liability insurance and professional indemnity insurance, they will also need a policy that covers their work for ten years after completion. This policy is called l’assurance responsabilité décennale.
A reputable insurance broker will advise you of the right business insurance for your needs, but always check the policy thoroughly to ensure it covers everything you require as it could become a costly mistake in the future if the policy falls short on cover in the area you need it.
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