Insurance cancels? This is how you react correctly and avoid disadvantages

Terminated after the damage occurred

With this trick you can save your insurance coverage

An accident or other damage is annoying. Things get even more unpleasant if the insurer then terminates the contract.

If you no longer need insurance or want to change provider, you can cancel the policy. What many people don’t know: Insurers can also terminate the contractual relationship after a settled claim. This can be a problem for insured people.

As a result, you could have problems finding a new insurer. Or, due to the supposedly higher risk, it only grants severely limited benefits. The Association of Insured Persons (BdV) advises those affected to take action immediately after the insurer terminates their contract.

BdV board member Bianca Boss explains that in some cases insurers are willing to continue an existing contract if certain adjustments are made. In a so-called contract restructuring, for example, a deductible is introduced or an already agreed deductible is increased for a certain period of time.

According to the BdV, excluding individual services can also be an option – but only if insured people can and want to bear the corresponding risk themselves.

If the insurer is not prepared to make any adjustments, a so-called cancellation reversal may be an option. The idea behind it: Insured parties cancel the contract themselves before the insurer’s cancellation takes effect. “In the case of mutual terminations, the one that takes effect first always applies,” says Boss.

According to the BdV, this can make the search for a new provider easier. Anyone who has terminated a contract themselves may have better chances than someone who has been terminated by the insurer.

But why does an insurer terminate a contract at all even though the insurance was taken out to cover the event of a claim? First of all, once the damage has been settled, both sides can generally terminate the contract. This special right of termination results from Section 92 of the Insurance Contract Act (VVG). However, this only applies to property and casualty insurance. This right of termination does not apply to health and life insurance.

Termination may be an option for the insurer if damage indicates that a customer’s risk is higher than originally assumed. For example, if self-inflicted accidents occur more frequently within a short period of time, the insurer can expect further damage. From his point of view, the insured risk and the premiums paid for it may then no longer match.

The insurer can terminate the contract as soon as it has settled the damage or justifiably refused service. In principle, he does not have to give a specific reason for the termination in his letter. However, he must adhere to the legal deadlines.