In some cases, a contract may be terminated prior to maturity, both the insurer and the insured. The first thing to do, if you want to terminate his contract prematurely, is to read the insurance contract, plus any amendments or lines in small print, where often hidden special termination clauses. And if the insured may have the opportunity to terminate the insurance at any time, do not forget that the insurer is also entitled. Whether for one or other of the parties, the trick is finding the right pattern.

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Generally, the insurance contract shall contain the names of the parties involved, the purpose, duration, the obligations of the parties, the subscription ratio, the general conditions, special conditions and finally termination. Our study focuses on the latter. A contract may be terminated either at term or prematurely by either party, that is to say, the insurer and the insured.

Termination of a futures contract

The most common is the tacit contract, fixed term may be terminated by either party giving notice. It is addressed to the headquarters of the Insurance Company or one of its agencies. The form and the notice period varies between countries, if not stipulated in the contract. The Insurance Code provides for a one month’s notice either by registered letter with acknowledgment of receipt or statement countersigned by or against receipt or by court action or by other means provided in the contract. Failure of the notice period has important consequences for the insured: it can result in penalties such as denial of cancellation by the insurer or the payment of damages for the insurance company.

However, the insurer and the insured can terminate the contract in some cases except in very specific conditions: health insurance contracts, contracts of life insurance, as these contracts are random.

The early termination by the insurer

Termination may be right in case of total loss of the insured as a result of an event not specified in the contract as the occurrence of a natural disaster that destroyed a building insured. The disposition of a vehicle also causes the termination of the contract within which varies by country from the date of transfer to a third party or scrapping. But the insurer may also request the termination in other cases. We can mention the first serious irregularity in the declaration of the insured or the policyholder, a misrepresentation on the estimation of insured objects leads to the termination or annulment of the contract according to the good or bad faith of the insured . Then, the termination may be made at the increased risks such as death of a person following a car accident while the insured was not fit to drive (alcohol or cannabis). Repetitive claims such as traffic accidents or theft suspects and repetitive valuables may result in termination. Finally, mention must be non-payment of premium or death of the insured.

The early termination by the insured

The insured may request termination of any change in circumstances when the hedged risk is related to its previous situation but it is also subject to a notice period. This is the change of address, in effect, for example, the risk of insecurity in the country and city are not the same, the safety rules of the insured property is different depending on the region and the topography of the situation and the location of the property (cars, art objects, paintings, houses) then the change of marital status because of the insured property may be affected. Divorce or marriage has an impact on property and income of the insured.

Similarly, the change of occupation of the insured may have an impact on the contract because their income can decrease (or increase). It also happens that the insured is dissatisfied and cancel the contract because the insurer has terminated one of its contracts as a result of an accident or has not consented to reduce the premium in the significant reduction of risk, as for example the upgrading of the electrical circuit of the house or installing an alarm system performance. At an unjustified increase in insurance premiums during the year, the insured has the right to terminate the contract if the increase is not provided in the contract or exceeds the percentage set by the law.

From the foregoing, the failure to meet obligations under the contract by either party may result in termination. Also, it is recommended to the insured to answer honestly to questions on subscription and read the contract before signing to avoid possible cancellation later. The insurer must also inform the insured in advance of the contract contained an information leaflet or a proposed contract. It should be noted that if one party does not agree on the termination, it may request termination if the arbitration court or mutual agreement have failed.