What Happens if You Don’t Pay Your Insurance Premium on Time?

What can happen to you if you don’t pay your insurance premium on time? On paper, the rules are clear: when you do not pay your contributions, the insurer is authorized to terminate your contract under article L.113-3 of the insurance code. But when it comes to determining how much you still owe your insurer, the answer is much less obvious.

Renaissance MP Marie-Pierre Rixain therefore questioned the government on this subject, taking the example of a household paying its premium monthly. According to her, in the event of termination of the contract by the insurer, “he has the right to sue the insured” for the payment of the annual premium, “while retaining the benefit of termination”. In other words, the household finds itself forced to pay the balance of the annual contribution, for insurance from which it will no longer benefit. The parliamentarian regrets that the “contractual relationship as governed by law is strongly unbalanced in the direction of insurers” and asks the executive if it intends to modify the law to better protect households.

This problem is “closely followed” by the government, replied the Ministry of Economy and Finance on August 29. Two cases must be distinguished. The insurer is authorized to suspend the guarantees of a contract until its renewal if it notices a payment default. Before reaching this point, however, he must respect a period of 30 days following the formal notice to pay. This is the worst possible scenario for the insured because if he does not quickly put his hand in the wallet, he must pay the monthly payments during the suspension period, although he is no longer protected by his contract. . Not paying your premiums on time can therefore play nasty tricks on you.

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But the insurer can go further if you delay paying. He has the possibility of simply terminating the contract 10 days after the expiration of the 30-day period following the formal notice. And, paradoxically, this situation is more favorable to you. If the insurer opts for this radical solution, the case law of the Court of Cassation, of February 4, 2016, protects households against the risk of overcontribution. Bercy specifies, this time citing article L-113-4 of the insurance code, that“in the event of termination due to unpayment, the premiums due are those due on the day of termination, and not those which would have been due for the subsequent period if termination had not taken place”. In fact, the termination of a contract puts an end, from its date, to the obligation for the insured to pay his contributions. Consequence: the contract holder is only required to pay his annual premium in proportion to the period during which he benefited from the contract.