The Insurance and Social Security Supervisory Authority (ACAPS) has issued a warning to motor insurance companies over practices that are deemed as infringing on policyholders' rights.
Two recent circulars highlight the issue of partial compensation and the rejection of coverage related to drivers' licences.
Deductible
In the first document, the Authority warns of situations where some insurers apply the full deductible, even when the insured is not entirely responsible for the loss. This calculation is effected under supplementary coverage such as third-party liability or collision damage.
According to insurance regulations, an insurer who compensates their client has the right to seek recourse against the liable third party, up to the amount paid. However, when the insurer has been unable to obtain full compensation, it deprives the insured of their right of recourse for the uncovered portion, which constitutes a violation of their rights.
The Authority stipulates that the insurer has an obligation to actively represent the insured's interests under the legal defence and recourse guarantee. This implies sharing with the insured, proportionally, the amount recovered from the at-fault third party. It requests that insurance companies pay the additional compensation due, according to a precise formula that takes into account the portion of the damage not reimbursed.
Driving licences
In the second circular, ACAPS addresses the exclusion of coverage related to drivers' licences. It clarifies that this clause can only be invoked if the driver does not hold a valid licence at the time of an accident.
However, the Authority notes that it has observed this exclusion is being applied without verifying that the driver actually holds a valid licence. Some insurers have justified their refusal of compensation solely on the grounds of the expiration of the driving licence as shown in the physical document bearing the licence, without verifying the actual validity of the right to drive. Some claims have also been denied because, at the time of the accident, the driver had not yet completed the administrative procedures for renewing the physical driving licence.
The Authority considers such rejections unfounded; an expired document does not automatically mean that the driver has lost their right to drive.
ACAPS is asking insurers to ensure that the application of the exclusion is strictly limited to cases where the driver does not hold a valid driver's licence or has been disqualified from driving at the time of the accident.
ACAPS reiterates that the loss of fitness to drive can only be established by a final decision to suspend, withdraw, or cancel the licence issued by the competent authorities, in accordance with the provisions of the Highway Code.