Archive for: ‘septiembre 2014’


13 septiembre, 2014 Creador por nhabogados

Over last few years, there has been a huge amount of breaches of insurance contracts as policyholders cancel their policies before the end of the term. The reasons could be different such as they might find a cheaper policy, or better cover or because policyholders decide to go back to UK.

Before cancelling any insurance contract, it is advisable to check termination clauses set out in the contract in order to find out the length of the contract and time notice that you agreed to give the insurer at the time you contracted the policy. It could be that nothing is stated about the cancellation period required, in which case you should be aware of what Insurance Law Act 50/1980 dated 8th October says about it.

Article 22 of the aforementioned law establishes that policyholders must notify insurance companies by giving at least two-month notice before the end of the contract otherwise the insurance contract might be extended yearly, and policyholders will be liable to pay the full year premiums notwithstanding they have cancelled the policy. Moreover, insurance companies will be entitled to sue policyholders in order to recover their unpaid annual premiums.

The said law does not mention the way of notification so that means that it could be a letter, email or even a telephone call. However, lawyers highly recommend our clients to notify insurance companies by sending a kind of notification written in Spanish called burofax (with certification of content). That kind of service must be sent from any post office to the registered address of the insurance company even if you send a copy of the burofax to the broker address for their knowledge or just for courtesy.

The content of the notification could say something to the effect of;

“According to the termination clause of the contract or according to the article 22 of the insurance contract act you give two month notice to the insurer in order to cancel the insurance contract”

However, it would be advisable to instruct a lawyer or to get appropriate advice in order to draft that official cancellation letter as individual cases could be different to each other.

 13th September 2014


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