Auto insurance termination by the insurer: when and why?

Auto insurance termination by the insurer: when and why?

Do you have an auto insurance contract and are wondering if the insurer can terminate it himself? As an insured, we don't always think about what the company has the right to achieve and yet it pays to be informed to prepare for these eventualities. In this article, you will see the different conditions that make it possible for the insurer to terminate auto insurance.
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Can the insurer terminate my auto contract on expiry?

Article L113-12 of the Insurance Code authorizes the insurer to terminate the contract after one year, just as the insured could do. To do this, he must respect a notice period of 2 months before the expiry date of the auto insurance contract. Likewise, this possibility must be mentioned in the contract to prevent the civil liability of the insurer from being incurred if damage were to occur to the insured for lack of information.

It is necessary that a registered letter with acknowledgment of receipt be sent to the customer explaining the reason, unless it is to cover a professional activity. In the latter case, the mail can be sent electronically.
Termination for non-payment of the auto insurance premium: how does it work?

Once the deadline has passed, the insurance company sends the insured within 10 days a formal notice to pay within 30 days. Following this delay, if the premium has still not been paid, the auto insurance contract is suspended and therefore the guarantees too.

Then, the insurer has the right to terminate the auto insurance for the next 10 days. If the premium is paid within this period, the guarantees are reinstated. However, claims may not be compensated between the time of suspension of the auto insurance contract and its reinstatement.
What is auto insurance termination for increased risk?

As indicated in the Insurance Code with Articles L113-2 and L113-4, the aggravation of the risk is one of the valid reasons for the insurer to terminate the contract. It corresponds to an increase in the probability of damage occurring. Any change in auto risk must be notified to the insurer within 2 weeks digitally or in writing by registered mail.

Following this, the auto insurance company announces to the insured by registered letter its desire to terminate the contract or to keep the guarantees. If the choice is a termination, it takes place 10 days after notification.

When the change concerns a high aggravation of risk, the auto insurer has the right to offer a higher insurance premium. The insured not wishing to follow up on the offer may terminate the contract at the end of the 30 days following the offer.

The insurer loses its right to terminate auto insurance if it continues to collect premiums after learning of the increased risk.
Can the insurer terminate the contract after a loss?

The mention of termination of auto insurance by the insurer following a claim must be indicated in the general conditions for this condition to be considered. It takes place 1 month after the warning to the insured. After this time, the insurer cannot go back on this ground and the contract continues.

However, automobile insurance is a specific insurance allowing the insurer to terminate civil liability coverage beyond maturity and after a loss. Article A211-1-2 of the Insurance Code sets out this hypothesis in the event that:

    the driver of the insured vehicle was intoxicated or under the influence of drugs and other narcotics;
    the conditions of the incident committed an infringement of the Highway Code leading to a suspension of the driving license for at least 1 month or to a cancellation, whether by judicial or administrative decision.

If the insurer, notified of the last claim, does not stop collecting auto insurance premiums, it can no longer request termination of the contract for this reason.
False declaration or omission by the insured: how?

The misrepresentation or the omission of important information about the risk is one of the reasons why the insurer can terminate the contract before a loss occurs. The auto insurance contract ends 10 days after notification of termination to the insured by registered mail. The company also has the option of proposing an increase in auto insurance premiums.