Legal Tip 54. Cancellation of Home Insurance contract
Friday, March 6, 2009 @ 2:00 PM
The contract can be cancelled by either party.
*The insurer may proceed with the cancellation in the following cases:
1. If the insured has lied or concealed regarding the necessary data provided for the hiring of the policy. In these cases, the insurer has a month since that circumstance is known to cancel the insurance. The insured will not be entitled to reimbursement of any premium for the time remaining to fulfil the term of the contract unless it is proved that he did not act in bad faith.
2. If during the contract, the risk covered by the policy is increased (for instance: less security of premises, more objects than initially).
In these cases, the insurer can either cancel the contract or propose a change in the conditions of it,which, if not accepted, will entitle the company to terminate the contract, in both cases he will be obliged to pay back the proportionate part of the premium.
If, in bad faith, the insured person conceals to the company a situation that exacerbates the risk covered by the policy and this is materialized, i.e., the incident is covered by the insurance (theft, fire, flood, etc.). , the insurer may be free to pay compensation.
In cases where there is no bad faith, the insurer is only obliged to pay the difference between the contracted premium and that which would have derived from the increased risk.
3. The insurer can cancel the insurance if the object is sold. He will repay the outstanding premium.
*The insured may also proceed to the cancellation of the insurance contract on the following cases:
1. When there are circumstances that have made the risk decreased, so the premium should be reduced and the insurance company does not agree on the reductions.
In these cases, the policyholder is entitled to receive the difference between the premium he has paid and that other which would have corresponded due to the decrease of the risk.
2. When the consumer buys an insured object and he is not interested on the Insurance hired for the said object.
Bolonia Beach by Aroma de Limón af Flickr.com