A policy in this line sells on its breadth: all risks of physical loss or damage, nail to nail, agreed value. On one specific peril, that breadth can nonetheless be narrower than an ordinary property policy's, for a reason having nothing to do with the quality of the drafting. The French natural catastrophe regime, created by the law of July 13, 1982, extends BY OPERATION OF LAW every property damage policy to cover events recognized by ministerial order. The extension is neither negotiated nor bought: it attaches to the contract by force of law, against a uniform surcharge, set at twelve percent of property premiums until December 31, 2024 and raised to twenty percent on January 1, 2025.
The first question in a collection file is therefore rarely the one asked. It is not whether the policy covers flood, it is whether the policy is a property damage policy within the meaning of the regime, because on that answer depends an extension nobody requested and that may already exist. One collector may discover they pay the surcharge and hold the cover without knowing it; another, whose collection is placed on a foreign market, may discover they have neither, and that their specialist policy is then the only thing between them and the flood.
The regime's second feature is that its trigger is administrative rather than physical. With no order, there is no natural catastrophe cover, whatever the reality of the flood or the subsidence. And the order does not merely recognize an event: it names communes and a period. The geography and the calendar of the cover are therefore written by a third party, after the fact, under a procedure to which the insured is not a party. We meet here a structure already encountered elsewhere in insurance: a cover conditioned on a third party's act inherits that party's calendar, and the act may arrive months later or not at all.
Then comes the collision specific to this line, and it bears on place. The order attaches to a commune. Nail to nail cover attaches to the object and follows it everywhere. These are two logics that do not overlap, and a work in motion can fall between them: on loan in another commune, or crated at a carrier's, it is not in the commune named by the order, even though the collection it belongs to was struck. Conversely a work brought temporarily into the named commune for an exhibition is inside it, without its owner having anything to do with the stricken territory. The regime does not cover collections, it covers places, and a collection is precisely what circulates.
The third feature unsettles collectors more than any other, because it touches a habit. The regime carries a statutory deductible, which cannot be bought down or negotiated. In a line where everything is agreed, the value as much as the depreciation cap, one suddenly meets a figure set by regulation, identical for everyone, independent of the care taken over conservation. That absence of modulation is the accepted flip side of the scheme: the surcharge is uniform, so it rewards no prevention, and the deductible rewards none either. An exemplary collector and a careless one are treated identically, which is true nowhere else in the contract.
The two possible routes for one and the same damage then have to be compared, because they do not produce the same result. If the specialist policy covers the natural event directly, as one peril among others, it operates with no order, with no commune condition, with the agreed deductible and on the agreed value: broader than the regime on all three counts. If it excludes the event and refers back to the regime, the cover still exists but changes nature, becoming conditioned on an administrative act, bounded by geography and cut by a non-negotiable deductible. The same flood, on the same work, therefore settles very differently according to a single line of the contract, and it is that line to read first.
One difficulty remains that nothing fully resolves, that of works spread across several places. A collection rarely lives at a single address: part is hung, part is in store, part is on loan, part is at a restorer's. The regime treats each of those places separately, which produces a result nobody anticipates: one and the same climatic event may be recognized for the store and not for the home, or the reverse. The useful discipline is therefore the same as in the module on mass loss, and it is the only point where the two meet: a schedule of values sorted by location, kept current with movements, is also what makes it possible to say, on the day of the order, which works were where.
A collection is split between a home and a store located in two neighboring communes, plus two works on loan to a museum in a third commune and one work crated at a carrier's at the time of the events. A flood occurs during the night of October 14 to 15. Water reaches the store, not the home. On January 20 following, an interministerial order recognizes a state of natural catastrophe for the commune of the home and for the period October 14 to 16, but not for that of the store, whose application is adjourned. The damaged works are all in the store, for 2.6 million euros of agreed value. The collector's fine art policy excludes natural events and refers back to the statutory regime. The collector believes the January 20 order opens the cover.
The January 20 order is of no use to him, and that is the misreading a competent professional makes because he reads the order as recognition of an event when it is the designation of a territory. It names the commune of the home, where no work was touched, and it does not name that of the store, where all of them were. The statutory cover therefore operates on none of the damaged works, and the specialist policy operates no better since it excludes the natural event and refers back to precisely that regime. The collector is covered by nothing for 2.6 million, without any clause having been misapplied. The file then turns on a single ground, the adjourned communal application: it is the store's commune that must obtain recognition, an administrative step to which the insured is not a party but which he can support. Two points deserve note in passing. The two works on loan in the third commune and the one crated at the carrier's would have remained outside the regime even had everything been recognized, because they were in no named commune: nail to nail follows the object, the order follows the place, and nothing joins the two logics. And above all, the line that decided everything was in the policy long before the flood: drafting that covered the natural event directly would have operated with no order, no commune condition and on the agreed value, and the claim would have settled in October.
- 01The regime extends every property damage policy by operation of law: the first question is not whether you are covered, but whether the policy falls within the regime's scope.
- 02The trigger is administrative: with no order there is no cover, and the order names communes and a period, thereby writing the cover's geography and calendar.
- 03Nail to nail follows the object, the order follows the place: a work on loan or crated can fall between the two logics.
- 04The statutory deductible cannot be bought down: in a line where everything is agreed, it treats the exemplary collector and the careless one identically.
- 05A policy covering the natural event directly operates with no order, no commune condition and on agreed value: the line referring back to the regime decides everything.