At 67, Jean pushed the orange Alert us button after his insurer unilaterally decided to terminate his home insurance contract for claims. In question ? This resident of Plainevaux, in the province of Liège, has been affected three times in recent years. He explains to us that AG therefore felt that he had compensated him too much compared to what he pays him each year. Today, John can no longer find an insurer who agrees to cover him because of the reasons given by his insurance company. What is loss ratio? Is it legal to terminate a contract when the customer is, in his opinion, not at fault? What to do in these cases?
“I received a letter from my AG fire insurance saying ‘The company has decided to terminate your contract due to the loss experience’. In 2020, the storm tore my pergola, and in 2021, damage due to a water pipe clogged sewer, so nothing my fault. The problem: other insurance companies don’t want to insure me because of the loss experience. What to do?, writes Jean via the orange button Alert us. This inhabitant of Plainevaux, in the province of Liège, finds himself today in a very embarrassing situation.
A client of BNP Paribas Fortis for a few years and insured with AG Insurance, he has been damaged three times since the purchase of his house in 2018: in 2020, lightning struck his home, destroying his water boiler hot. Shortly after, a storm ripped out his pergola. And finally, in 2021, the roots of a fir tree on his property damaged the pipes leading to the sewer, creating a flooding problem in his cellar. Jean’s insurance intervened each time, paying the indemnities to his client. Total cost of the various repairs? More than 28,000 euros.
I didn’t expect there would be a storm or that roots had gotten into my drains
A priori, nothing was the fault of this 67-year-old resident since, according to him, the intervention of his insurance has never caused any problems. “Experts came to the site each time to see the damage. And I was compensated without any problem”, he assures. And yet, Jean received, a few months ago, a letter informing him that his home insurance contract would end at least next June. “This letter said that I was terminated for claims when I had nothing to do with it… It was the bad weather. I had not foreseen that there would be a storm. And for the water damage, I could not not guess that roots had gotten in and were going to block the pipes”laments John.
“I find it incomprehensiblecontinues the sexagenarian. I have a mortgage for my house with BNP Paribas Fortis and I almost had to take out my fire insurance with them. So now they are terminating me for a building which, basically, does not belong to me yet since I have five years left to repay the loan. In an attempt to understand the reasons for this unexpected termination, our interlocutor said he had contacted his bank. “I phoned Fortis to ask if they thought it normal that I was fired while my mortgage was still outstanding. They said they couldn’t do anything, that it was a decision of AG. And since I’ve only been a customer with them since 2018, they found that they didn’t make enough money from my payouts compared to what they paid out for claims.”he informs us.
An extremely rare situation, according to AG
On the side of AG Insurance, he was told that the company would not reconsider its decision. “And the same thing, they say that until now, the amount of the contributions that I paid does not fill the amount of the indemnities due to the disasters”says John.
Contacted by us, AG Insurance responds: “It is normal for an insurance company to look closely at a customer who has several claims over a short period of time. This is also what AG does. The measures taken can be different, ranging from imposition preventive measures, the application of a higher deductible or the cancellation of certain guarantees, until the termination of the contract. However, the company points out that this type of situation is extremely rare, “but it happens.”
For reasons related to data protection and customer privacy, AG will not comment on the specific case here that interests us. But the insurer points out that, if the insured does not agree with the company’s decision, he can always “send a complaint to the Customer Complaints department, which will analyze its file with the necessary perspective and objectivity, to assess whether the company’s decision is justified or not.”
Insurance companies do not accept customers terminated due to claims
But the problem that worries Jean is not limited to the simple termination of his contract. The latter explains to us that following AG’s decision, no insurance company now agrees to insure his home. “I am insured until June 18 of this year so I tell myself that I will still start looking elsewhere. I inquire, receive quote proposals and when I read the general conditions, I see that the insurance companies do not take no customers terminated due to claims…”
Jean called several companies, they all answered the same thing. “Yuzzu, for example. I phoned and explained my situation but they replied that if I was terminated for claims, they cannot insure me. I also rang AXA, at their home, it is no. At Ethias, they said they were going to ask my insurance to send the reasons for termination but I haven’t heard from them. And more recently, I called Beobank. They asked me for the claims papers. I sent them, they have to contact their insurance but I haven’t heard from them yet either”details the 67-year-old from Liège.
Our interlocutor explains to us that he has a little trouble understanding this situation since he believes that he has nothing to do with it in this affair. But for the professional union of insurance companies, AG’s decision is completely legal. “It depends on the risk policy of each insurer, depending on its portfolio and its pricing policy”underlines the spokesperson of Assuralia, specifying that“a home insurance is not legally compulsory but when you buy a property, in general, the bank which grants the mortgage loan requires that you insure your property.”
Advice from Assuralia
Nevert Degirmenci explains to us that the loss experience “takes up the history of the last claims that a person has had” over a given period. “Some insurers will count the number of wrongful claims, others the overall number of claims. For car insurance, it’s easier to determine. For a home, it’s not the same”she says.
Is one customer more at risk of loss than another? This is one of the questions an insurer will ask when making a decision. “For example, if an expert was sent on site to assess the damage, it is possible that he found that certain preventive measures had not been implemented. But, without knowing a specific file, it is difficult to to express themselves and to give reasons which would explain the situation”continues Nevert Degirmenci.
In general, the spokesperson for Assuralia today wishes to give several tips if one finds oneself in a similar situation. The first thing is to use an insurance broker. “It’s his job to find the best formula for his clientinsists our interlocutor. He will defend the client’s case with the various insurers he works with to try to find the formula that best suits the situation.” It is true that insurance brokers have the advantage of working with several insurance companies. “We are therefore not bound by the acceptance criteria of this or that company, notes Luc Vermeylen, insurance broker at the Van Ingelgem office in Brussels. We will try to direct the client to the company whose acceptance criteria would ensure the good there.”
This broker however insists: “Most frequently, these assets to be insured will no longer be insured under the same conditions and often, these conditions are more restrictive or penalizing”. This can, for example, pass an increase in the annual premium. “If an insurer is hesitant, the broker can try to negotiate on the deductible, so the part that remains the responsibility of the person assured”, slips the spokesperson for Assuralia. An expert could also be sent on site to examine the home and, depending on the situation, make recommendations to limit the risks. “The broker may possibly propose precautionary measures to reassure the insurer”she adds.
The insurance ombudsman as a last resort
And if a customer does not agree with the decision of his insurer, there is always the possibility mentioned by the spokesperson of AG Insurance: to file a complaint with the company. This is also what the spokesperson for Assuralia proposes. “Each insurance company has a complaint service, which can be found on the insurance website. Customers will receive a reasoned response within 30 days normally”supports Nevert Degirmenci.
Finally, a last solution remains to contact the insurance ombudsman. A free service for the consumer who will examine insurance disputes in order to reconcile the two parties.