The Insurer’s Right to Terminate an Indemnity Insurance During the Insurance Period
The insurer has the right to terminate an indemnity insurance during the insurance period in the following five situations:
Prior to the grant of the insurance, the policy holder or the insured has provided false or incomplete information and the insurance would not have been granted had the correct information been available.
The policy holder’s or the insured person’s circumstances, of which he/she has provided information or which have been noted in the insurance policy, change to such a great extent that the insurer has not been able to take these into account.
The insured has intentionally or recklessly omitted to comply with protective measures.
The insured has caused a damaging event either intentionally or recklessly.
After an insurance event, the insured has fraudulently provided the insurer with false or incomplete information, which have an effect on the evaluation of the liability.
When the insurer receives information regarding the ground for termination, it shall without delay terminate the insurance in writing. The insurance will expire with one month’s notice.
In the indemnity insurance the parties may agree that the insurer’s liability shall continue period of insurance at the time, unless either party terminates the insurance (automatically renewed policy). The insurer may give notice until the end of the period of insurance. The insurer may terminate the insurance only for reasons in accordance with the good insurance practice. The notice of termination must be sent to the policy holder no later than one month before the expiry of the period of insurance.
There are also provisions of termination of personal, accident and sickness insurances as well as group benefit insurances in the Insurance Contracts Act.
If the policy holder does not pay the insurance payment within one month from its due date, the insurer normally has a right to terminate the insurance 14 days from the date of sending the notice of termination. However, if the insurance payment has been paid before the expiry of the notice period, the insurance is not terminated after the notice period. It is advisable to check exceptions regarding indemnity insurances and personal insurances from the terms and conditions of insurance and the Insurance Contracts Act.