Insurance at €15 per month can end up costing more than insurance at €25 per month over five years. It all depends on what happens after you take out the policy: annual premium increases, the excess you have to pay when you make a claim, and cover that doesn’t protect you against the right risks. Choosing cover that fits your budget means comparing what you’ll actually pay over time, not just the price shown for the first month.
The true cost of insurance: why the monthly premium isn’t enough
Have you ever compared two quotes by looking only at the monthly premium? It’s the most common approach—and also the most misleading. Insurance policies change from year to year, and several factors can push up the bill even if nothing about your circumstances has changed.
First, annual premium increases. Most insurers raise their prices every year. France Assureurs’ 2025 report shows that home insurance premiums continued to rise even as the frequency of paid claims fell. So the increase doesn’t always reflect your own level of risk.
Second, taxes. The tax on insurance agreements, which applies to home insurance, has risen from 12% to 20%. This increase raises your premium regardless of the cover you’ve chosen. It is rarely highlighted in comparison tools.
Third, the excess. This is the amount you have to pay yourself after making a claim. A policy costing €12 per month with a €500 excess will cost you more in the event of water damage than a policy costing €18 with a €150 excess. To explore the different components of a policy and estimate your costs, insurance on My Budget View lets you see how these costs add up over several years.
To compare the true cost, add up premiums, excesses and out-of-pocket costs over three to five years. Use a simple spreadsheet: enter the annual premium, apply the average increase seen in previous years, then add the likely excess based on your claims history. The results often change the ranking of the offers.
Insurance cover: distinguishing useful protection from unnecessary extras
A policy can list twenty types of cover and still fail to properly protect you against the risks you actually face. A classic trap is taking out a “premium” plan to be on the safe side, only to discover that theft cover excludes items left in a vehicle, or that water damage cover doesn’t apply to external pipes.
Match your cover to local risks
France Assureurs reports significant regional differences in the frequency of certain home insurance claims. A home in a flood zone has different needs from a fifth-floor apartment in the city centre. Before comparing prices, identify the specific risks in your area.
Here are the types of cover to check first, depending on your circumstances:
- Third-party liability: mandatory for tenants, it covers damage you cause to others. Check the compensation limit, which can vary considerably from one policy to another.
- Water damage and fire: included in almost all policies, but exclusions vary. Read the terms covering pipes, roof leaks and electrical damage.
- Theft and vandalism cover: useful if you live on the ground floor or in a high-risk area. Unnecessary if you live in a secure building and own few valuables.
- Legal expenses cover: often included with premium bank cards. Check that you aren’t paying twice for the same cover.
A good rule of thumb: make a list of your last three claims or household incidents. If none of them relates to an optional type of cover you’re paying for, that cover is probably unnecessary for you.
Switching insurers mid-year: requirements and timing
Many policies stay active simply because people don’t get around to changing them. You receive the renewal notice, miss the deadline to respond, and the policy renews automatically—sometimes with a premium increase that you only notice on your bank statement.
The Hamon Law allows you to cancel a car or home insurance policy at any time after the first year, with no fees or penalties. Your new insurer will handle the cancellation process for you. You don’t have to send a registered letter to your previous insurer.
For health insurance, you can also cancel after one year of membership, with no fees. The time it takes to set up a new policy varies between providers, but the principle is the same: you’re no longer tied to a policy that doesn’t suit you.
When to start comparing
The best time to compare offers is two months before your renewal date. By then, you’ll have received your renewal notice with the new price, giving you a concrete basis for comparison. Request at least three quotes and specify your current cover so you can compare like for like.
Excess and compensation limit: the first two figures to check
Before signing a policy, two details matter more than anything else. First, the excess: the amount you pay out of pocket for each claim. The higher the excess, the lower the premium—but the more a claim will actually cost you.
Next, the compensation limit. This is the maximum amount the insurer will pay. If your belongings are worth more, you’ll have to cover the difference yourself. Many policies set a separate limit for each category, such as furniture, jewellery and computer equipment. Check that these limits match the actual value of what you own.
A low-cost policy with a high excess and a low compensation limit can leave you with a substantial bill. This is the most common pitfall with introductory offers. The few euros you save each month disappear as soon as you make a serious claim.
Choosing insurance that fits your budget isn’t just about finding the lowest price. It means balancing the monthly premium, an acceptable excess and cover that matches the risks you actually face. A policy reviewed every year and adjusted to your circumstances offers better protection than one taken out once and never reassessed.
