When insurers say "it's no longer insurable", they're making a political choice

Insurability is not a law of physics

In discussions about the future of the Cat-Nat scheme, one word keeps coming up like a fatality: "insurability". A risk that recurs too often, whose cost becomes too high, would by definition be "uninsurable". The logical consequence would therefore seem inevitable: taking clay shrink-swell subsidence (RGA) out of the scheme.

Thomas Bézy, a PhD candidate at the Paris School of Economics and researcher at the World Inequality Lab, directly challenges this reasoning: "Insurability depends on our collective willingness to contribute, or not, to help the victims of RGA and global warming. It's not a law of nature."

This distinction is fundamental. Behind the technical vocabulary of insurance lies a societal choice. Are we willing to maintain national solidarity in the face of a climate risk that is becoming the norm? Or will we let the market decide — with the consequences that entails for the millions of homeowners in clay-soil areas?

The definition of insurability: a principle the climate is bending out of shape

Insurance rests on a simple principle: pooling a random risk among a large number of policyholders. Randomness is essential — an event that is certain, by definition, cannot be insured at a reasonable price: the premium would have to equal the cost of the damage.

Clay shrink-swell subsidence is losing its random character. The droughts of 2003, 2018, 2019, 2022 and 2025 have followed one another at a pace that calls into question the very notion of an exceptional event. In the clay-soil areas of the South, the Center and the Paris basin, the question is no longer "will it happen?" but "how often?"

Yet insurance law recognizes that a risk known and foreseeable at the time of underwriting can legitimately be excluded or priced at its real cost. This is the argument some industry players wield to justify a gradual exit of RGA from the Cat-Nat scheme. Thomas Bézy challenges this logic, showing that it conceals a political choice — the choice not to collectively fund climate adaptation.

46 to 53% of climate damage in France is uninsured

The reality of France's "protection gap" illustrates what a system produces when it leaves entire swaths of risk uncovered. According to reinsurer Swiss Re, 46% of damage linked to climate events in France went uninsured in recent years — around 16 billion euros left to be borne by individuals, local authorities or the state. Insurance Europe goes further, citing a 53% protection deficit in France.

The "protection gap" — the share of climate damage left uninsured in France — thus stands between 46% according to Swiss Re (roughly 16 billion euros borne by policyholders) and 53% according to Insurance Europe, despite the existence of the Cat-Nat scheme, one of the most comprehensive in the world. These figures don't yet include RGA, which has been little studied internationally so far: the real deficit could be even higher.

These figures are all the more striking given that France has the Cat-Nat scheme — one of the most comprehensive natural disaster coverage systems in the world. With such a system in place, 46 to 53% of damage uninsured: without it, the consequences would be devastating.

The American precedent: what happens when insurers pull out

Thomas Bézy's warning about insurer withdrawals observed in certain US states is not a hypothetical scenario. It's a documented reality.

Two scenarios stand in contrast. Without strong public intervention, the market scenario results in a gradual withdrawal of private insurers from high-risk areas, soaring premiums for remaining homeowners, massive non-insurance in the most exposed areas, and collapsing property values in clay-soil zones — the precedent of California and Florida, where major insurers pulled out starting in 2023-2024, illustrates this. Conversely, a solidarity scenario, maintaining and reforming the public system, keeps risk pooling among all policyholders, guarantees affordable premiums even in exposed areas, ensures universal coverage independent of local risk levels, and offers predictability for homeowners and the property market — provided the system is reoriented toward prevention and its funding is strengthened.

In California and Florida, faced with soaring claims linked to wildfires and hurricanes, major insurers such as State Farm, Allstate and Farmers announced in 2023-2024 their partial or total withdrawal from these markets. Homeowners left without private coverage were forced to turn to insurers of last resort at premiums three to five times higher — or to go without insurance.

The result: property markets freeze up, values collapse in the most exposed areas, and homeowners — often the poorest, who cannot afford to move — are left trapped.

Prevention as the answer to the insurability impasse

If the debate over RGA insurability is political, the individual response to that debate is, in fact, very concrete.

Whether it's resolved by maintaining and reforming the Cat-Nat scheme, by a gradual phase-out, or by a hybrid solution, the outcome for homeowners who haven't taken action will be the same: less coverage, more costs to bear.

The CCR itself is advocating for extending the "Build Back Better" principle to drought — rebuilding more resiliently after a claim. This is an acknowledgment that prevention must become central, not as an option but as a condition.

For a homeowner in a clay-soil area, the window for preventive action — while the foundations are still sound and a soil water-regulation solution can be installed at an affordable cost (well below underpinning work) — is independent of political decisions on the Cat-Nat scheme. It closes with time and drought cycles, not with ministerial decisions.

Whatever the state decides — to maintain, reform or scale back the Cat-Nat scheme — the only protection that depends on no political decision is a home with stable foundations. Prevention, still affordable today, is the only answer that holds regardless of the scenario.