Update to French Insurance Code regarding time limits for claims handling in “damage insurance”

On 26 May 2026, the Act “on the simplification of economic life” (Act n°2026-403) was passed in the French Parliament. Its aim was to simplify relationships between economic actors, namely between small companies and banks or insurers.

The Act inserted a new article L. 121-18 in the Insurance Code that applies to “damage insurance”, in particular, property and casualty insurance.

It imposes strict time limits on the insurer for the handling of claims.

First, if the insurer appoints an expert to determine the cause and value of the loss suffered by the insured, the insurer must offer an indemnity or reject the claim with a letter explaining the grounds of the refusal within six months from the date of the notification of loss.

If the cause or value of the loss have not been determined within six months, the insurer must issue either a provisional offer to the insured or explain the reasons for its refusal to make a provisional offer.

The expert appointed by the insurer must send its report to both the insured and the insurer.

Second, if the insurer does not appoint an expert, the time limit to make an offer or send a reasoned refusal is shortened to two months.

Further, the insurer has one month, starting from the acceptance by the insured of the provisional or final offer, to commission the repairs, or 21 days to pay the indemnity.

If the insurer fails to make the payment within 21 days, the sum will generate interest at the legal rate.

The time limits do not apply in the case of an act of God or “force majeure.”

These rules will apply to new contracts or tacitly renewed contracts once the decree that will detail the scope of the new provisions is published, including specifying the situations where the deadlines do not apply, as well as which insurance contracts are to be excluded from these provisions.  

The French Prudential Authority (ACPR) has authority to control compliance with these time limits.

Furthermore, as of 28 May 2026, all termination letters issued by insurers must state the grounds for the termination.

Comment

These new provisions are clearly aimed at accelerating the handling of claims by insurance companies. However, complying with the deadlines, especially if experts need to be involved, will likely be a challenge.

Barthelemy Taÿ-Pamart, juriste, also assisted in the preparation of this briefing.