In an important step towards managing the impacts of climate change on real estate, on April 6, 2023, the French National Assembly passed major legislation aimed at improving compensation for damage caused by the shrink-swell phenomenon of clay (RGA). This text recognizes the seriousness and increasing frequency of droughts, which have devastating effects on properties built on clay-rich soils.
In this article, our expert Samy Kraiem takes stock of this proposal and the evolution of compensation criteria. To find out more, take a look at this study, co-authored with the Conséquences association, or try our free application to assess the risk at any address in France.
Understanding swelling risk and compensation in France
Clay shrinkage and swelling are caused by variations in soil water content. During periods of drought, clay soils contract, while during wet periods they swell. These cyclical movements can cause structural damage to buildings: cracks, compromised foundations and, in the most serious cases, uninhabitable dwellings.
The "Régime des catastrophes naturelles", often dubbed CatNat, is designed to compensate for material damage caused by natural disasters. This natural disaster insurance scheme is based on the principles of national solidarity and equality before public burdens, guaranteeing uniform protection for all citizens in the face of natural disasters. The mechanisms of this system are enshrined in the French Insurance Code, principally in articles L.125-1 et seq.
The “CatNat” scheme is designed to help victims of exceptional, uninsurable events. In France, damage caused by clay shrinkage and swelling is not covered by conventional insurance and is only compensated under this scheme.
This system relies on a complexe administrative procedure to officially recognize the "état de casatrophe naturelle" (state of natural disaster), the occurence of an exceptionnal natural disaster, at municipality level. This recognition allows to activate specific insurance cover, enabling policyholders to be compensated for uninsured material damage. The recognition procedure involves a number of stages, from the initial declaration of the disaster by private individuals, to the examination of each local claims and the publication of inter-ministerial decrees.
The Rousseau law, which passed its first reading on April 6 2023, aims to improve compensation for property damage caused by the shrink-swell phenomenon. Its goal is to simplify the criteria for recognizing a state of natural disaster, and ensures a faster, fairer compensation procedure for affected property owners. The aim is to better protect homes against the growing impact of climate change.
The new provisions for shrink-swell insurance in France
Debated in the Senate on May 30, 2024, the provisions of the proposed law aim to put insurers and owners at the center of concerns, by facilitating declarations, communication and expert appraisals. The main new provisions revolve around several points:
Clearer communication and justification
When the state of natural disaster is not recognized, the decision must now be clearly detailed and justified. This includes information on appeal procedures and access to administrative documents, in particular the expert reports on which the decision was based.
Reinforced expertise procedures
Obligation for insurers to cover the costs of appraisals and counter-appraisals by qualified experts.
Introduction of a legal presumption that any damage occurring during a drought is primarily due to swelling, thus facilitating claims by homeowners.
Professional certification
Creation of a label for experts (Expert RGA) and companies (Entreprise de remise en état RGA) specializing in shrink-swell related damage, guaranteeing high standards of competence and reliability.
Broader state recognition of natural disasters
Use of soil moisture variations as the criteria to recognize a drought as a natural disaster.
Automatic declaration of a state of natural disaster if the soil moisture indicator breach a one-in-ten-years low.
Application of the decree over a period of twelve months in swelling risk zones, to take account of delayed effects.
This more generalized recognition of the state of natural disaster is achieved in particular through the use of a new meteorological criterion. To give a clearer idea of what's going to change, we'll take a closer look at the new meteorological criterion used from 2024 onwards to characterize the abnormality of the drought leading to recognition as a natural disaster, and thus the compensation provided.
A new criterion for the recognition of natural shrink-swell disasters
The new meteorological criterion used for the recognition of natural disasters linked to differential ground movements caused by drought and soil rehydration was introduced with the Interministerial Instruction relating to the procedure for recognizing the state of natural disaster of April 29, 2024.
This meteorological criterion is based on an indicator of the content of water in the surface soil of the municipalities concerned: the Soil Wetness Index or SWI. The intensity of a drought episode is deemed abnormal when this indicator drop below a certain threshold. This value of the indicator is calculated by Météo-France using meteorological data such as air temperature, precipitation, solar radiation and wind.
Météo-France uses a hydrometeorological model that takes into account evapotranspiration, infiltration, drainage and river flows to represent the water balance of surface soils. This model simulates water exchanges between the soil and the atmosphere, improving the representation of soil moisture at different depths. The model calculates the Soil Wetness Index, which assesses the state of a soil's water reserves in relation to its optimum reserves.
What is new compared to the previous regulation set in 2019 and in application for events up to 2023 is the introduction of different thresholds for SWI. Now, there are three alternative thresholds for a drought to be deemed abnormal, and thus open the right to recognition as a natural disaster:
Minimum annual soil moisture index: The episode is considered abnormal if the SWI has a return period greater than or equal to 10 years. In other words, the probability of reaching the drought level must be less than 10% per year. In practice, this criterion is deemed to have been met if the minimum monthly index for the year is among the three lowest of the last thirty years.
Abnormal succession of significant episodes: A succession of significant drought episodes over several years can also qualify an episode as abnormal. This is assessed by comparing the minimum soil moisture index for several consecutive years.
Neighboring communes criterion: If a neighboring commune has experienced an abnormal drought episode, the commune concerned can also be recognized, even if it does not directly meet one of the two previous criteria.
These new evaluation methods, introduced in 2024, bring significant improvements. Modeling has also been improved through the use of the latest version of Météo France's Safran-Isba-Modcou (SIM) modeling chain. This hydrometeorological model incorporates the latest technical advances and provides greater precision in modelling moisture exchanges between the ground and the atmosphere. What's more, soil moisture is now analyzed on an annual rather than seasonal basis, enabling more consistent recognition of natural disasters throughout the year. Finally, this assessment uses a sliding period of 30 years instead of 50, thus reflecting more accurately recent climatic changes.
The meteorological criterion for assessing the abnormality of clay shrink-swell is based on rigorously defined modeling methods and thresholds. The improvements introduced in 2024 enhance the accuracy and relevance of these assessments, facilitating the recognition of natural disasters linked to these phenomena.
Conclusion
For homeowners, this legislation brings much-needed relief and clarity. By simplifying the claims process and ensuring fair compensation, the legislation eases the financial and emotional burden on those affected by shrink-swell. Homeowners will have better access to expert assessments, and can expect faster and adequate repairs or compensation for their damaged properties.
For the insurance industry, the law should provide a clear and stable framework for dealing with drought-related claims. It encourages transparency and accountability, ensuring that insurers are well equipped to manage and compensate for these specific damages. The mandatory use of qualified experts and the introduction of the new label system may enhance the credibility and efficiency of damage assessments and repair work.
This legislation is a crucial step in adapting to the realities of climate change. It recognizes the growing risks posed by extreme weather events and provides a robust mechanism to support affected property owners. By improving the compensation process and ensuring fair treatment, this legislation is a first step towards building resilience to future climate challenges.
While it is vital to improve recognition and compensation for damage caused by climate change, it is always preferable to anticipate and adapt before the damage occurs. Callendar offers a free online tool for assessing the swelling risk for a building.
A pioneer in climate risk assessment in France, Callendar specializes in developing accessible solutions for anticipating the effects of climate change at local level. Whether it's for a single site or a portfolio of thousands of assets, for a one-off project or to set up customized tools, to assess risks now or throughout the 21st century... We have the tools to help you. Contact us to discuss your project!