2026 Budget: The government scraps the «riots» surcharge in favor of a dedicated fund
The government has decided against imposing a mandatory surcharge on all insurance policies to cover damage caused by riots. Instead, the government plans to create a «riot fund,» financed by insurers and managed by the Central Reinsurance Fund. This shift prioritizes the regions most at risk, including New Caledonia and the French West Indies.
A Step Back from the Across-the-Board Surcharge
This is a significant change in the structure of the 2026 budget. The government will ultimately not implement the across-the-board levy of at least 2 % on auto and home insurance policies, which was initially proposed to cover the damage caused by the riots. Confirming a report in Les Échos, the French Ministry of Finance (Bercy) stated that this mechanism—deemed socially sensitive and politically risky in an inflationary environment—had been abandoned.
A «riot fund» entrusted to the CCR
Instead, the government wants to create a fund dedicated to riots, financed by insurers and managed by the Caisse centrale de réassurance (CCR), a public agency already responsible for covering exceptional risks. According to the French Ministry of Finance, this mechanism is intended to improve compensation for damages while avoiding overly broad pooling of costs, which is perceived as unfair.
A Deliberate Focus on the Overseas Territories
The fund is primarily aimed at local governments and businesses located in the hardest-hit regions, particularly New Caledonia and the French West Indies. The Ministry of the Economy refers to a refocusing «for greater proportionality and efficiency,» going so far as to describe it as a «breath of fresh air» for New Caledonia, which is facing massive damage and stricter insurance conditions.
Adoption via Section 49.3 and Effects to Watch For
The measure is included in the spending section of the 2026 budget bill, which was adopted under Article 49.3 of the Constitution. While the elimination of the general surcharge provides relief to policyholders, it does not rule out localized increases in premiums, as insurers may pass on their contribution to the fund to policies in areas deemed high-risk. This is a budgetary and political compromise, the actual impact of which in the overseas territories will depend on the specific implementation details.
