Case study Covered claim - car insurance cancelled

What happened

Mr B was unlucky: he had to report several accidental damage claims within a short period of time. These were all settled by the insurance company. However, after he had reported his latest claim, the insurer terminated his policy prematurely in the event of a covered claim.

Not only did the insurer terminate both his casco insurance and his liability insurance. Mr B also struggled to find a new insurance, thus risking to be banned from using his own car. He wasn’t sure this was right, so he came to us to take a look.

Outcome of Ombudsman investigation

We explained to Mr B that according to law (art. 42 VVG/LCA) both the insured person and the insurance company may cancel an insurance policy prematurely in the event of a claim covered by the insurance.

When we checked the policy, we found that it covered a liability and a casco insurance. In such cases, both can be terminated. We also examined whether the insurer cancelled the policy in due time, namely at the latest upon its last payment. We told Mr B that we didn’t think that the insurer had treated him unfairly.

With regard to the difficulties Mr B encountered to find a new insurance, we advised him to order several offers (preferably directly from the agency and not online). If the application is rejected, he should ask the insurer whether it is possible to conclude a contract under adjusted conditions (e.g. with a higher deductible).