Car Insurance – The Risks Of A False Declaration

When subscribing to the auto insurance contract, the insured generally completes an estimate form to assess the risks to be covered for the insurance company and thus determine the appropriate premium. In the event of a false declaration, cancellation by your insurer is possible.

As provided for in Article L113-2 of the Insurance Code : “The insured has the obligation to answer all the questions asked exactly “
But some policyholders are very quickly tempted to make a false statement to weaken the risk and reduce the premium.
The insured is also required to inform his insurer of any change in the situation which may create new risks or aggravate the risks. It can be a change of city or car or an additional secondary driver.

The different kinds of misrepresentation

At this section, we will be looking at different type of misrepresentation that deals with insurance policy.

1. Intentional misrepresentation

If the insurer discovers that you knowingly lied when declaring your risks when taking out the contract , you risk a heavy penalty .

The law provides that a judge pronounces the nullity of the insurance contract . Added to this is the reimbursement of sums received during the life of the contract.

The premiums that the insured has paid will remain with the insurer.

You have understood: The older the contract, the more difficult the economic consequences for the insured will be .

Most often, the insurer notices the misrepresentation on the part of the insured when the latter suffers a loss and it is necessary to look into his file.

2. Unintentional misrepresentation

If the insured makes a false statement but it is considered “in good faith” and unintentional , he will be penalized less significantly because there was no intention on the part of the insured to defraud.

Three sanctions are possible. Either the insurer:

  1. Increases the policyholder’s premium so that it is proportional to the risks.
  2. Terminate or cancel the contract.
  3. In the worst case, he demands damages by taking legal action against you.


If the false declaration is discovered after the claim, depending on the seriousness of the lie, the nullity of the contract does not always apply and a lighter sanction will be adopted.

It can be the reduction of the allowance in other words: the proportional rule of the premium .

This practice consists in reducing the indemnity of the insured at the time of his disaster . It penalizes the insured who has paid a premium that is too low in relation to the real risk to be insured.

The insurer does not compensate the entire loss.

The indemnity is therefore reduced in proportion to the rate of the premiums paid in relation to the rate of the premiums which would have been due .

For example , the insured pays an annual contribution of €450 for his third-party car insurance contract.

He said he did not have his car modified.

However, the latter suffered a claim on his car. The insurer notices at this time that it is modified, which aggravates the risk.

The amount of the insured’s annual contribution should have been €500.

The damage he suffered is €15,000. During compensation, the insurer will apply the proportional premium rule, and it will only pay: the amount of damage x (premium paid / premium due) i.e. 15,000 x (450/500) = €13,500.

Insurance after a termination for misrepresentation is not easy.

Few offers are present in the market and the offers are expensive. To get the best possible price, one solution: compare aggravated risk contracts.


Hope you now have better understanding of false declaration for car insurance. And also hope you can this content gives you ideas on how to avoid them.

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