Borrower insurance
False health declaration: nullity of the contract or simple reduction of the indemnity?
Nullity or indemnity reduced pro rata: everything hinges on intent, and it is for the insurer to prove it. What is enforceable against you, and how to react.
It all depends on the intent. An intentional false declaration, which distorts the insurer's assessment of the risk, results in the nullity of the borrower insurance contract: no indemnity, premiums retained. An omission where bad faith is not established only reduces the indemnity, in proportion to the premiums paid compared to those that would have been due. The proof of intent lies with the insurer.
By Sandy MASCART, mandataire d'intermédiaire en opérations de banque et en services de paiement ORIAS 26000541 sous le mandat de CDV PATRIMOINE & ASSURANCE (ORIAS 14005573)
Key points
- Two regimes coexist: an intentional declaration annuls the contract, a good-faith omission only reduces the indemnity, pro rata of the premiums.
- Nullity requires three cumulative conditions, but it applies even if the omitted risk had no link with the actual cause of the loss.
- It is for the insurer to prove the intent and its effect on the assessment of the risk: the good faith of the insured has nothing to demonstrate.
- Only a precisely asked question is enforceable: a question formulated in general terms does not ground a reproach of an imprecise answer.
- The limitation period does not run from the signature, but from the day the insurer discovers the inaccuracy, often at the time of the loss.
- An omission spontaneously reported before any loss falls under the most favourable regime: adjustment of the premium or termination.
A false health declaration does not automatically void your mortgage insurance: without proven intent, the indemnity is merely reduced, and the burden of proof lies with the insurer. Here is how to respond to a refusal and regularise an oversight in time. The complete subject: the borrower insurance dossier.
Nullity or reduced indemnity: everything depends on intent
Intentional false declaration: contract void, premiums retained by the insurer (Article L. 113-8). Omission without established bad faith: indemnity reduced in proportion of premiums paid on those that would have been due (Article L. 113-9).
Intentional: nullity, under three conditions
- an information omitted or inaccurate ;
- intentional ;
- which changes the object of the risk or diminishes the insurer's opinion of it.
It applies even if the omitted risk is unrelated to the claim; the loan, however, continues.
In good faith: a reduced indemnity, not eliminated
- Discovery before claim : the insurer adjusts the premium, with your agreement, or terminates by refunding the uncovered premium.
- Discovery after claim : the indemnity decreases in proportion to the premium difference. An oversight that would have significantly increased the contribution reduces it significantly.
| Intentional declaration | Good faith omission or inaccuracy | |
|---|---|---|
| Text | Ins. Code, Art. L. 113-8 | Ins. Code, Art. L. 113-9 |
| Condition | Intentional concealment or false declaration, which changes the object of the risk or diminishes the insurer's opinion of it | Omission or inaccurate declaration where bad faith is not established |
| Who must prove | The insurer, on the three elements | Nothing to prove: it is the default regime |
| Fate of the contract | Void | Maintained, unless termination or premium adjustment before claim |
| Fate of the premiums | Acquired by the insurer | Refunded pro rata in case of termination |
| Fate of the indemnity | None | Reduced in proportion of premiums paid on those that would have been due |
| Fate of the loan | It continues to run, in full | It continues to run, for the non-indemnified balance |
The insurer must prove the intention, not you
It is the insurer who invokes the nullity: it is for them to establish its three elements. As long as bad faith is not proven, Article L. 113-9 applies.
A letter of nullity is a claim, not a decision. Reply in writing: on what precise question is it based, and how would your answer have changed their assessment?
A vague question does not ground the reproach (Article L. 112-3 of the Insurance Code): only the questions put to you are enforceable against you. Keep a copy of the signed questionnaire: see reading a notice step by step.
No questionnaire, no false declaration
La part assurée sur l'encours cumulé des contrats de crédit, par assuré
Article L. 113-2-1 du code des assurances. Le plafond s'apprécie par assuré, sur la part assurée de l'encours cumulé — deux emprunteurs ne comptent pas pour un seul.
- En vigueur depuis le
- Source
- Article L. 113-2-1 du code des assurances — Légifrance
The conditions are cumulative: see the Lemoine Act. Occupation, sports and tobacco remain to be declared according to the contracts.
Article L. 1141-5 du code de la santé publique. Le point de départ est la fin du protocole thérapeutique, jamais le diagnostic ni la rémission.
- En vigueur depuis le
- Source
- Article L. 1141-5 du code de la santé publique — Légifrance
Keeping silent on what the law forbids to ask is a right: see the AERAS agreement.
Smoking, occupation, medical history: three oversights, three costs
- Smoking: a precise and dated question, direct impact on the premium. Read the period specified.
- Occupation and sports: the oversight often arises from a change during the contract. Your policy schedule states what must be declared.
- Medical history: an old or misunderstood history is not concealed. The wording of the question carries the most weight.
Limitation period: the age of the contract offers no protection
The limitation period is short, but it only begins to run from the day the insurer discovers the inaccuracy, often the day of the claim.
Article L. 114-1 du code des assurances. Le 1° du même article reporte le point de départ, en cas de réticence ou de déclaration inexacte sur le risque, au jour où l'assureur en a eu connaissance.
- En vigueur depuis le
- Source
- Article L. 114-1 du code des assurances — Légifrance
Surcharge and exclusion for the same condition: contestable
Article L. 1141-6 du code de la santé publique. Le cumul reste licite sur deux pathologies différentes : c'est le mot « au titre de cette même pathologie » qui borne la règle.
- En vigueur depuis le
- Source
- Article L. 1141-6 du code de la santé publique — Légifrance
Such a proposal can be contested in writing.
An oversight? Regularise it before the claim
Before a claim, the insurer adjusts the premium or terminates the contract: far less severe than a reduced indemnity. Send a dated letter:
“Under contract no. …, I bring to your attention the following information, not mentioned at the time of my joining on [date]: … Please inform me of the consequences for the cover and the premium.”
Keep proof of posting and do not change insurance during the investigation. Is a period of sick leave in progress? Follow the claim notification.
Refusal received: have the file reviewed
Before accepting, consult a consumer association, the departmental housing information agency, or a lawyer.
A doubt about the questionnaire? Ask the question by telephone before signing, or via the contact form.
This article is for informational purposes only. The activity of insurance intermediation is carried out as an ancillary activity to the activity of intermediation in banking operations: it does not constitute an offer of insurance, nor personalised advice on a specific contract, nor a legal consultation.
Create your file: insurance is prepared alongside the loan.
Sources
Read next
- Home loan insurance in Lyon: Sandy MASCART
- Mortgage in Lyon: frequently asked questions
- Mortgage insurance refused or surcharged: the AERAS agreement, appeals and solutions Refusal, exclusion or surcharge: the three levels of AERAS review, the capping mechanism, appeals, and the realistic alternatives when nothing works out.
- Reading a borrower insurance policy document: the six lines that determine your compensation, and the seventh Incapacity, compensation, deductible, exclusions, age limits, TAEA: the reading order that reveals what you will receive, and the forgotten seventh line.
- Work stoppage and loan insurance: who to notify, within what timeframe, and what blocks the payment Declaring a work stoppage to loan insurance, in the real order: the eight steps, the three documents always missing, and the only fatal deadline.
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