2026 Finance Act: Introduction of a New Mandatory “Property Damage” Coverage: Riots or Civil Unrest Coverage

The 2026 Finance Act marks a significant development in the insurance sector in France. It provides for the creation of a new mutual risk-sharing fund for “riots,” intended to better manage and finance damages related to social movements and acts of collective violence.

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This measure responds to a recent reality: the significant rise in costs associated with episodes of public unrest. Until now, insurance policies have largely excluded damage related to riots, except for specific extensions. According to the Insurance Code, these events were considered difficult to model and too volatile to be included in standard coverage. The result: partial coverage, often a source of uncertainty for both policyholders and insurers.

A sharp rise in claims

The past few years have marked a turning point. Three major events illustrate this trend:

Yellow Vests (2018–2019): approximately €256 million in damages
Urban riots (2023): approximately €730 million
New Caledonia (2024): approximately €1 billion€

These figures reflect a sharp rise in the cost of social unrest for the insurance sector.

A mandatory mutualization fund

The reform establishes a mandatory guarantee fund designed to cover damages resulting from riots. Its main objectives:

To pool risk among insurers
To finance exceptional losses
To ensure more consistent compensation across the country
To strengthen the stability of the insurance system

This fund will be financed by a mandatory contribution from insurers, integrated into the property damage insurance ecosystem. This mechanism will take the form of a solidarity contribution for all insurers, the rate of which will be set by decree (max 1.5% of net premiums for damage to land motor vehicles, personal and non-agricultural business property, and business interruption, for risks located on French territory).

Major impacts for the insurance sector

However, this reform raises several questions:

Significant technical and operational complexity
Increased pressure on insurers’ financial capacity
A potential impact on insurance premiums
A reorganization of reinsurance mechanisms
Legal uncertainties related to the definition of covered events

Despite strong opposition from the insurance industry to this measure—which is viewed as insufficiently prepared, economically burdensome due to the expected impact on policyholders’ premiums, and likely to undermine reinsurance capacity—the 2026 Finance Act was upheld by the Constitutional Council on February 19, 2026. We now await the corresponding implementing decrees to specify the implementation dates, financing, deductibles, etc.

With this reform, the government aims to address an economic and social reality that has become unavoidable: the increasing frequency and cost of incidents of collective violence.