Lapse of warranty is a key concept in insurance which means that the insurer can refuse to cover a claim if certain conditions are not met. This may be due to a breach of contractual obligations by the insured or to specific circumstances surrounding the claim.
Common causes of warranty lapse
There are several common causes of lapse of warranty notably :
- Non-payment of insurance premiums: If the insured does not pay the insurance premiums on time, the insurer may refuse to cover a claim.
- Misrepresentation: If the insured has made a misrepresentation when taking out the insurance, this may lead to a forfeiture of cover. For example, if the insured declared that he never had an accident whereas he had one previously, the insurer may refuse to cover the loss.
- Non-compliance with the conditions of the insurance: If the insured does not comply with the conditions of the insurance, this may lead to a forfeiture of cover. For example, if the insured has failed to update their contact information or report a change in circumstances, the insurer may refuse to cover the claim.
- Fraudulent use of the insurance: If the insured uses the insurance fraudulently, this may lead to a loss of cover. For example, if the insured intentionally caused a fire to receive compensation, the insurer may refuse to cover the loss.
The consequences of forfeiture of warranty
If a forfeiture of cover is invoked by the insurer, this means that it will refuse to cover the claim. This can have significant consequences for the insured, including:
- Additional costs: If the insured has to pay the costs related to the claim, this can lead to considerable additional expenses.
- Financial losses: If the claim is related to material damage, the insured may suffer significant financial losses if the insurer refuses to cover the damage.
- Credit problems: If the insured cannot pay the costs related to the claim, this can lead to credit problems.
- Disputes: It is possible that the insured and the insurer have a dispute concerning the forfeiture of cover. The insured can then choose to call on a lawyer to try to assert his rights.
It is therefore important to understand the conditions of the insurance and to respect the contractual obligations to avoid a lapse of guarantee. It is also recommended to keep evidence of the condition of the property insured and to report any change in the situation to the insurer.