House insurance question - contented automatic renewal

[jrhartley]

Hello

I was wondering if I could pick the forum's collective brain on a really annoying ongoing dispute about my household insurance that has now resulted in my being threatened by the debt collectors.

In brief - when I arrived in France in July 2003 and bought my house, I needed to arranged home insurance straight away, so went to the local agent, who was selling policies with NATIONAL SUISSE.  I signed a contract for a year's insurance and paid cash there and then (it was about EUR360 FYI).  In May 2004 I did some shopping around and got a better quote from AXA (around EUR250) so I emailed my agent and asked what the premium would be with national Suisse for 2004/5.  I didn't receive any response.   So I assumed that the contract had reached its expiry in July 2004 without renewing and took out the cheaper policy with AXA.

At the end of August 2004, I received a reminder from my agent that I owed EUR380 for my home insurance.  I say reminder, but this was the first letter I'd received about the policy renewal price - and I received this some 50 days after my initial policy with National Suisse had already expired.  I was insured with AXA by this stage, so I wrote back to say that I didn't need the National Suisse cover as I'd got a better deal elsewhere.  The agent then calls up and tells me that I have to pay as I didn't cancel my contract at least 2 months in advance by lettre recommandee.  My argument was that she had not replied to my email nor had National Suisse sent me a renewal reminder informing me of the new premium.  I said, as an extreme example, what if National Suisse had decided to increase my policy premium to, say €2000 without telling me the new premium price in advance - I'd still have to pay for it?

What is more, I've found out that despite National Suisse demanding the full EUR380 odd for the full year's cover, they actually went and cancelled the policy in August 2004....

Any thoughts on this would be appreciated.  I thought that automatic contract roll-overs were illegal under EU law - I've got a copy of my original contract with National Suisse and its not written anywhere on that that it will renew every year unless I write to tell them not to. 

thanks!

 

[Teamedup]

E mails are no good when dealing with such things. As they said, lettre recommandé with accuse de reception is the way to send things. When receiving the replies keep the envelopes.

This is the catch 22 part of the system here. You didn't cancel properly and didn't pay up.... so you still owe them the money in spite of them cancelling. Unless someone knows how to jump hoops through the french system, then I can't see how you can avoid coughing up for this.

[BJSLIV]

Under French law, unlike the UK, insurance contracts are self-renewing. Unless you give the notice specified in the contract, 30 days or even three months, the contract is automatically renewed. They will then pursue collection of the amounts outstanding. The only ways you can avoid renewal if you don't give the notice are if you have sold the property or if the premium increases by significantly more than is justified by inflation.

French people know the rules and often give precautionary notice, even if they eventually stay with their existing insurer. You are not the first person to fall into this trap. Your main grievance is probably with the AXA agent, who could have warned you of the risk. 

Unless you are very lucky you will have to pay what the original company are demanding.

[jrhartley]

Thanks for the replies.  But isn't it normal to actually get a devis before being chased for what you owe, 2 months after the event - surely I need that information in advance rather than in arrears?

Also, what about the EC law angle - strikes me as a massively anti-competitive practice?  Maybe those boys in Strasbourg should be worrying less about Ryanair getting kickbacks from airports and more about people being swindled by arcane legal systems that should be outlawed.  And as I said, reading my contract, nowhere does it say that it renews automatically - my limited understanding of contract law is that there can't be "assumed knowledge" of national systems when contracts roll on like this, it needs to be something you actually sign.

Either way, thanks for your help.  Strikes me as a particularly bad commercial decision by the agent involved.  I can at least reassure myself that even with this, AXA's premium being so much lower than Nationale Suisse's I'll recoup the difference quite quickly.

 

 

[Teamedup]

We have never had a devis. We simply get the bill every year when it is due and therefore wouldn't be able to cancel in time to not pay it for that year. So we would have to plan ahead if we ever considered changing. I had never even thought about that aspect of it before.

Doing things at the right time here is primordial. I've been caught out and had to pay up. Resent it, you bet I have....... and it has always been made worse,when I was convinced that I had asked all the right questions. I know I'll never know it all, and know that there is a good chance that I will get caught out by something at some point, even after all these years.

As you have pointed out, there is competition. You have found a cheaper company. It is just that you didn't cancel your old policy as required that has led to this.

I suspect that you are going to have to pay up. And I 'm not sure if you would be allowed to get them to re insure your property if you paid up, as there may be a rule that says that you cannot insure the same property twice?! It would be worth asking though, if the circumstance does arise that you have paid two companies.

[Mazan]

French insurance policies renew automatically from year to year unless you specifically cancel them several weeks before the end of the contract. You must have some sort of stamped receipt that you have cancelled. A stamped, dated note from your local agent will suffice for this. This has nothing to do with French or EU law as such, it is contract law. The automatic renewal is part of the original contract and once you have accepted the terms and conditions of the original contract you are stuck with them.

The same applies to pay TV contracts (Canal+, TPS), mobile phone contracts, some ISP contracts (Tiscali), agricultural piped water contracts, private land use contracts and indeed any other similar contract that incorporates the phrase "reconduction tacite". These are very common in France.

The French equivalent of the UK consumer's association recently won a court case declaring such mobile phone contracts (and by extension all such clauses) abusive. However, the companies issuing the contracts know full well that they have much to gain by continuing to act abusively as few people will bother to take the matter to court, with all the expense and hassle that this involves.

You are stuck with both premiums until next year. In future always cancel in writing at least 2 months before the end of any contract and be sure to get a receipt for the letter.

[Racerbear02]

I got caught with a similar thing regarding motor insurance, I decided not to reinsure the car as I was not using it, I told the agent in advance that I intended to sell it and would not need insurance for the following year, however not far enough in advance, (2 months) and so was in the same position of being chased for I debt I did not feel I owed. After a lot of discussion, my agent managed to get the company to agree to cancel the insurance but I was still liable for the period up to the cancellation.

It might be worth trying this approach and offer to pay up to the date they cancelled it on you. Good luck

[jrhartley]

Thanks - I did try to do this in August when I first received her "rappel" - but she was having none of it - it was the full premium for the year, no argument about it.  Hey ho, looks like I'll have to pay the recouvrement contentieux.  thank God for the lower premium at AXA, and if there's any karma in the world, the original agent won't sell many houses in 2005!

 

 

[I1]

I believe I have read somewhere that, insurance premium increases are also limited for automatic renewal and that if the increase is above the limit then the client needs to be notified before the notification date for terminating (e.g. the 2 months mentioned) or maybe even longer to give the client time to respond. This effectively protects the client from an automatic massive premium increase without any option for non-renewal. I do not know if this applies to loss of discount type increases (e.g. introductory discount, no claims discount, etc.).

If what I read was correct and your insurers have increased their premium beyond those limits then you might be able to argue that you did not receive the increase notification.

Others with more experience might be able to confirm as to if this is correct and if so, what the premium increase limits might be (i.e. without adequate notification to client).

[BJSLIV]

If there is a right to cancel due to a large premium increase, then the percentage that brings this right into play will be specified in the contract. Increases due to a loss of no claims bonus do not trigger this right to cancel.

[Iceni]

Some elderly friends of ours had their renewal notice for their mutuelle and cancelled (or so they thought) and took insurance with another company. They then went through all the hoops you are going through and fought it and won. They used the arguments you are using and it almost got to court but the insurers backed down.

Up to you what you do but I would kick up a stink with head office at least, being annoying is always a good start. You may well have to pay but as you know, they cancelled the policy and you cannot be insured twice.

Don't you just love these quirks in the French law?

[BJSLIV]

Don't you just love these quirks in the French law?

I was discussing this with a friend only a few days ago.

Those little things that seem charming and "Oh so French" when encountered occasionally, probably from the safety of a hotel terrace, can rapidly become unbearable when they become part of day to day existence.

This particular friend was involved in the paper chase from authority to authority, trying to set up a gite complex, or on the other hand was it a small hotel complex........

[jrhartley]

Just to let you know what has happened - I wrote a letter to Nationale Suisse setting out all the problems, most notably the failure of their agent to respond to my emails in May (and in fact earlier in the year) and also the fact I didn't receive a devis regarding my higher annual premium.  To their credit, I received a letter a week later saying sorry for all the trouble, and that they are dropping the action.

Trouble is, I had already sent the cheque to the bailiffs as they said I had to pay with 48 hours of receiving the letter or face serious costs.  So now I've got to write to them and ask for them not to cash my cheque, or to send me the money back...  I suppose I'm in the clear now, so there's no reason why they can keep the money, but my notion of bailiffs is that they are not reknowned for their kind manner!

Thanks to all for their help - I wonder if that mobile phone case and automatic renewals is having repurcussions in the insurance world?

[Andyphilpott]

This post prompted me to look at my situation - so thanks very much. I had already told my agents that I would not automatically renew this coming October, and enclosed this years premium with the letter so they could not deny having received it! However I had no reply from them so following the post I chased them.

They have confirmed that they have or will give the required notice and then provide me with  renewal quote to compare with others.

I have to say that I have found them to be very good so far - they are Agence Eaton who sell Continent policies - and so long as they are not wildly adrift of the market I will stay with them, but it is definitely worth checking every few years to keep them on their toes.

Andy Philpott