During the term of a contract, it is possible that the risk, as described at the time the contract was taken out, may change.
- In the event of a considerable and permanent reduction in the risk, the insurer is obliged to grant a reduction in the premiums up to the amount due from the day on which it becomes aware of the reduction in risk. If the policyholder does not agree with the proposed premium, he has the right to cancel the insurance contract.
- During the term of a contract, the risk may also increase. Except in the case of a life, health or loan insurance contract, the policyholder is obliged to declare during the term of the contract any new circumstances or changes in circumstances which are likely to lead to a significant and permanent increase of the risk of the insured event occurring - provisional situations are therefore not taken into account.
The policyholder is obliged to communicate the increase in risk to the insurer, even though the insurer finds it out in another way.
Please note: It is also in the policyholder's interest to correctly inform his insurer. For example, you must inform your vehicle insurer that your son uses the insured vehicle on a regular basis, in particular to go to school, so that he becomes the main driver. For the insurer, the risk is indeed higher. In the event of a claim, you could be liable for failing to declare the modification. The insurer may claim that you acted with fraudulent intent and either refuse the cover (e.g. omnium insurance) or, in the case of compulsory insurance (e.g. civil liability car insurance) - after compensating the victim - recover its disbursements from the insured party or the policyholder. Moreover, this situation may be such as to prompt the insurer to terminate the contract, provided that the insurer reserved in the contract a right of termination after a claim has arisen.
If a claim arises when the policyholder did not fulfil his obligation to report a modification in the risk, the insurer is not necessarily obliged to provide the cover.
- If the policyholder cannot be held liable for the failure to declare, the insurer is obliged to pay the agreed cover;
- If the policyholder can be held liable for the failure to declare, the insurer is only liable to pay the cover in accordance with the ratio between the premium paid and the premium that the policyholder would have had to pay if the increased risk had been taken into account;
- If the insurer proves that it would not have insured the increased risk under any circumstances, the cover in the event of a claim is limited to a refund of the full amount of the premiums paid;
- If the policyholder acted with fraudulent intent, the insurer may refuse the cover. The premiums due up to the time the insurer became aware of the fraud are payable by the policyholder as damages and interest.
However, in the case of compulsory liability insurance, the insurer must provide the cover before exercising a right of recourse against the policyholder or the insured party.
In concrete terms, what happens when an increase in risk is communicated?
If the increased risk existed when the policy was taken out and the Insurer would only have granted the insurance under other conditions, it must, within a period of one month from the day on which it became aware of the increased risk, propose an amendment to the contract with retroactive effect to the day the increased risk arose.
If the proposal to amend the insurance contract is rejected by the policyholder or if, after a period of one month from receipt of the proposal, it is not accepted, the insurer may cancel the contract within 15 days.
If the insurer proves that it would not have insured the increased risk under any circumstances, it may cancel the contract within the same period.
An insurer who did not cancel the contract or suggest an amendment within the time limits indicated above may not invoke the increased risk in the future.