In which cases can the insurer refuse to compensate you?

Have you suffered a claim and your insurer refuses to compensate you? Several reasons can be the cause of this refusal of coverage: exclusions of guarantee, declaration of loss made too late, non-payment of your contributions… We take stock to see more clearly.

All the obligations and procedures to be respected to be compensated in the event of a claim are included in your insurance contract, so it is essential to read the general conditions of the latter carefully!

Disclaimer of warranty

All insurance contracts have warranty exclusions: these are situations in which the insurance does not cover you, and for which you will therefore not be able to receive compensation.

There are two types of warranty exclusions: legal exclusions, which are imposed by law, and contractual exclusions, which are specific to each insurer.

Regarding home insurance, here are the most common warranty exclusions:

  • Water damage caused by a lack of maintenance of the pipes;
  • A burglary was committed while your home was not locked or the alarm was not on;
  • A fire was voluntarily started by the insured.

These legal provisions must imperatively be mentioned in the insurance contract, and this in a clear, legible, and comprehensible manner. If the loss suffered is among the exclusions of cover from your insurance, then you cannot be compensated under any circumstances.

Warranty lapse

If you have not complied with certain obligations mentioned in your contract, your insurer may decide not to compensate you: this is called a forfeiture of cover. Thus, in the event of a claim for which you would normally be covered, you will not be compensated.

A forfeiture of warranty may be invoked in the following cases:

  • A declaration of the claim made too late if this delay has caused financial damage to the insurer;
  • A declaration of change of situation causing aggravation of the risks (moving house, extension of the dwelling, marriage, retirement) not declared, or declared late and also causing financial damage to the insurer;
  • A deliberate overstatement of the damage suffered, even when it does not cause financial damage to the insurance.

If a forfeiture deprives the insured of his right to be covered by a guarantee for a specific claim, the contract is not terminated for all that! The insured must therefore continue to pay his contributions and remain covered by the other guarantees of his contract.

For the insurer to be able to invoke a forfeiture of cover and therefore refuse to compensate you, a forfeiture clause must imperatively be included in your contract, as mentioned in article L113-2 of the Insurance Code. The forfeiture clause must be written legibly and visibly in the general and specific conditions of the contract.

Late claim notification

To be compensated by your insurance, whatever the situation, you must make a claim declaration in good and due form. You must therefore send a registered letter to your insurer to inform him of the loss, detailing as much as possible the damage suffered, and attach several supporting documents so that the latter can calculate the amount of your compensation.

Be careful, because this declaration of loss must be communicated to the insurance company within very strict deadlines, specified by article L113-2 of the Insurance Code. Depending on the claim to be compensated, reporting times vary:

  • 5 working days to declare a classic claim such as fire, water damage, or glass breakage;
  • 2 working days in the event of burglary or theft (in this case, the declaration of loss must be accompanied by a copy of the complaint filed);
  • 10 working days in the event of a natural disaster or 5 working days for a technological disaster, from the publication of the interministerial decree.

Except in the case of natural or technological disasters, the claim period always starts from the moment you notice the loss, and not from the moment it takes place.

If you do not respect these deadlines for making your claim, then your insurer is entitled to refuse to compensate you. These deadlines can sometimes vary according to the companies: to be certain of those applied by your insurer, do not hesitate to read your contract or contact them directly!

The lie or the omission

A false declaration to the insurance, if it is intentional, can also lead to a denial of compensation. Indeed, you are obliged to answer honestly and precisely to your insurer’s questions when you take out a contract.

These questions relate to your profile, the accommodation or vehicle to be insured, the value of your property, or your insurance history. Your insurance premium is calculated according to your answers to these questions, which is why it is essential to answer them exhaustively.

While it’s tempting to lie to get a lower insurance premium—saying your vehicle is parked in a locked garage when it’s parked on the street—misrepresentation can cost you dearly if your insurer notices!

In addition to a refusal of compensation in the event of a claim, you may be ordered to reimburse your insurance for the sums paid for a previous claim, and even see your contract terminated.

The same applies if you do not mention a significant change in circumstances, such as a move, a marriage, or the birth of a child.

Overestimating the harm suffered

You suffered a claim and when you declared to the insurance, you declared an amount much higher than that of the damage suffered to be better reimbursed? Be careful, because this overestimation can have serious consequences.

In addition to refusing to compensate you, your insurer can also file a complaint against you for production of forgery and use of forgery if you have communicated false invoices to it, for example. This scam is punishable by 3 years in prison and a fine of €45,000.

It is sometimes possible that the insurance offers you more realistic compensation after the visit of an expert to your home, responsible for evaluating impartially the real amount of the damage suffered.

Failure to pay dues

The principle of insurance is simple: in exchange for contributions, your insurer compensates you in the event of a claim covered in your contract. Thus, if you do not pay your insurance premium on time, your insurer may well decide not to compensate you in the event of a claim.

However, it is sometimes possible to ask for an amicable installment of your payments with your adviser by explaining your situation to him, and by negotiating the coverage of your claim – and therefore your compensation.

Denial of compensation in the event of a natural disaster

The most common denial of compensation in insurance is that occurs after a natural disaster. Indeed, the conditions for taking over the insurance after an earthquake or a flood, for example, are very strict: the claim must imperatively have been declared as being a natural disaster by the publication of an interministerial decree in the Official Journal.

In the case of house cracks caused by drought, you will have to wait for the publication of an order to be able to request reimbursement for the repairs to your house. This decree indicates precisely the geographical areas affected by the drought, the period during which it took place as well as the nature of the damage suffered.

Without the recognition of a state of natural disaster, you will not be able to claim any compensation! The natural disaster guarantee included in insurance contracts also includes many exclusions: be careful to read the conditions of your contract to find out if you can claim compensation.

Contesting a refusal of compensation out of court

Are you facing a refusal of compensation from your insurer, but you think that the latter does not have a valid reason? Know that you can contest this refusal to obtain compensation.

The first thing to do is to contact your adviser or the director of your agency to try to find an amicable solution to settle this dispute. Most of the time, a discussion makes it possible to clarify the reasons for refusing compensation and your insurer will be able to make a commercial gesture in your favor.

If the discussion does not give you satisfaction, you can then send a registered letter to the complaints or litigation department of your insurance company, explaining your situation and attaching as many supporting documents as possible attesting to your good faith.

You have a legal period of 2 years after a refusal of compensation to report your dispute to your insurer’s complaints department. After this period, there is a prescription: you will no longer be able to claim compensation!

Despite your letter sent to the insurer, your situation is still not resolved? It is then possible to ask for help from the Insurance Mediator, an independent entity whose mission is to find common ground between policyholders and insurers in the event of a dispute.

Recourse to the Insurance Mediator is free! All you have to do is make a request directly from the association’s website to set up your file.

Please note, to benefit from the help of the mediator, you must have previously attempted an amicable conciliation with your insurer, and not have had recourse to the courts.

Legal remedies in case of refusal of compensation

Finally, as a last resort, if the solution proposed by the Mediator does not suit you, you can take legal action by contacting the competent court according to the amounts of compensation concerned:

  • For an amount of less than €4,000, contact a local judge;
  • For an amount between €4,000 and €10,000, your file will be processed by the district court;
  • For an amount over €10,000, you will have to go to the tribunal de grande instance.

It is not necessary to seek a lawyer to defend your interests if the amount of compensation requested is less than €10,000. However, legal action is always expensive and can take several months or even years to succeed: weigh the pros and cons carefully before going to court!

By Cary Grant

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