France's riot damage doubles: Who will pay for thousands of wrecked shops?

The number of shops damaged during France's weekend riots has reached at least 3,000, twice the figure reported just a day earlier. ADVERTISEMENT ADVERTISEMENT Yet insurers, who are expected to pick up much of the bill, still have no estimate of what the destruction will cost them. France Assureurs, the country's insurance federation, told Euronews that its members were "fully mobilised to support affected policyholders". It could not provide an initial estimate of losses or say how many claims had been already filed. Its crisis team is now working with public authorities across France following what the federation described as "extremely violent events". French markets underperform as damage bill rises On Sunday, Carrefour chief executive Alexandre Bompard, who also chairs the FCD retail federation, estimated that around 1,500 shops had been affected. He put the industry's losses at several hundred million euros. By Monday, the government's count had reached 3,000. Carrefour alone reported damage at 50 stores, including 20 that had been looted. Financial markets were also under pressure on Monday. France's CAC 40 closed 1.1% lower, underperforming the broader Euro STOXX 600, down 0.9%. Carrefour shares lost 2.2%, while luxury group LVMH fell 1.8%. A Louis Vuitton boutique in Marseille was among the stores broken into over the weekend. Insurance stocks declined too. AXA shed 1.3% and reinsurer SCOR lost 0.9% in Paris. In Milan, Generali fell 2.3% and Unipol dropped 3.2%. French government bonds also came under selling pressure on Monday. The yield on the country's 10-year bonds rose by around eight basis points to 4.94%. Germany's equivalent yield increased by less than four basis points. That widened the difference between French and German borrowing costs to approximately 148 basis points. What the 2023 riots tell us about the cost France has a recent benchmark for what a weekend like this can cost. The riots that swept the country in June and July 2023 resulted in €793 million in insured losses, France Assureurs told Euronews. Insurers handled around 17,000 claims, averaging roughly €46,600 each. Two-thirds of the total, about €523 million, went on shops and business premises. A quarter, close to €200 million, went to local authorities whose town halls, schools and buses had been attacked. Cars made up the remaining 7%. Even those figures did not capture the full extent of the destruction. A subsequent French Senate inquiry estimated property damage at closer to €1 billion. Some losses had never been declared, while others were only partly covered by insurance. The comparison is particularly relevant now because the number of shops affected appears to be higher. CCI France counted around 2,500 vandalised businesses during the 2023 unrest. This weekend's government tally has already exceeded that figure. France's new riot insurance scheme is not ready France sought to address the insurance problems exposed by the 2023 riots in its 2026 budget law. The legislation makes riot damage cover compulsory in certain property insurance policies and creates a national fund to help insurers absorb major losses. Insurers would finance the fund through contributions of up to 1.5% of relevant premiums, while the state would provide guarantees of up to €4 billion a year. But the scheme has yet to take effect. It still needs European Commission approval and a government implementing decree. For businesses hit by this weekend's violence, that means compensation will depend on their existing insurance contracts. Insurance may cover the damage, but what about lost sales? Most French policies for shops and buildings include “riot and civil commotion” cover, according to France Assureurs. That usually pays for fire, theft, vandalism and smashed shopfronts. It also tends to cover the plywood boards and security guards a gutted store needs in the days afterwards. Lost trade is where many shopkeepers will come up short. Compensation for a full or partial closure depends on optional business interruption cover. It pays on lost gross profit, not lost sales, and normally only when physical damage covered by the policy forced the shop to shut. Some contracts go further and pay out even if the premises were untouched. That applies only “in the circumstances expressly specified in the policy”, the federation said. Policyholders generally have five days to notify their insurer, and filing a police complaint is a prerequisite for some types of cover. The state’s share of the bill Prime Minister Sébastien Lecornu said on Monday that businesses hit by the unrest would be able to put staff on activité partielle, France’s state-funded furlough scheme, from Tuesday. He also asked local officials to impose targeted curfews, and said a state of emergency would follow “if necessary”. President Emmanuel Macron refused the resignation of Interior Minister Laurent Nuñez, as the number of arrests passed 2,400. Every euro of support lands on a budget expected to post a deficit of 5.4% of GDP this year, with public debt at 119% of GDP. And while the final bill for the riots is still unknown, one thing is becoming clear: the cost will extend well beyond the shops that were attacked.