Auto insurance rates to rise in 2027

Price increases of 3% to 4.5% for auto insurance are expected in 2027, according to current projections. These increases may be even higher due to a proposed change in the tax on insurance agreements (TSCA), which affects insurance premiums.

TSCA funds public services

The TSCA is a tax applied to certain insurance premiums, paid by the insured. According to the Ministry of Economy, the revenue from this tax is currently used to support departments, particularly to cover new responsibilities and to fund fire and rescue services. A portion of the revenue is also returned to the National Family Allowance Fund.

Tax increase aims to support fire services

The proposed increase in the TSCA is outlined in Article 14 of the draft 2027 finance bill. This measure is intended to support businesses affected by the summer 2026 fires. The increase would generate an estimated 200 million euros by raising the tax rate by 0.9 percentage points on voluntary motor vehicle insurance.

Tax applies to most motor vehicle insurance

If adopted, the increase would apply to auto insurance, motorcycle insurance, and coverage for scooters and other motorized personal transport devices, except for the mandatory civil liability guarantee. Currently, the TSCA rate for motor vehicle insurance is 18%, and it would rise to 18.9%.

Measure remains under debate

The proposed increase has already faced numerous amendments, as noted by L'Argus de l'assurance. The final decision on whether to implement the change is still pending, and the measure remains subject to further discussion and potential modifications.