Do motor insurers have to refund money?

THE CONTROVERSY. The campaign circulated,

via social media, by the consumer association, estimates that lockdown measures and restrictions on movement have reduced the risk of claims, and that insurers should therefore refund or credit back a percentage of the amounts paid for car insurance. The association is also calling on the government to establish that users can choose whichever option they prefer: apply the discount to the next premium or receive a proportional refund of what has already been paid, without having to request it from their company. WHAT THE LAW SAYS. It is true that the Insurance Contract Act, in its Article 13, recognises the right of the policyholder or insured party, in the event of a reduction in risk, and not only for motor insurance, to obtain a reduction in the premium.

Article thirteen. During the course of the contract, the policyholder or the insured party may notify the insurer of any circumstances that reduce the risk and are of such a nature that, had they been known to the insurer at the time the contract was concluded, it would have agreed to it on more favourable terms. In that case, at the end of the period covered by the current premium, the amount of the future premium must be reduced accordingly, and the policyholder shall otherwise be entitled to terminate the contract and to a refund of the difference between the premium paid and the premium that would have applied, from the moment the reduction in risk was notified.

The case-law criterion on this type of premium is as follows: only successive premiums can be reduced, i.e. renewal premiums, and only where the factual conditions required by the rule are met (Supreme Court ruling of 23 July 1996). Instalments of the annual premium cannot be reduced, and the premium already paid is never refunded. What's more, the insurer must always be asked to assess the case. Furthermore, given the indivisible nature of the premium, the event that reduces the risk must be lasting over time, not a one-off. The same applies in the case of an increase in risk with the corresponding increase in premium. CONSEQUENCES FOR THE CLIENT. A circumstance such as this will carry more or less weight with the company depending on the ability to demonstrate the actual reduction in insured risks. Right now, it is impossible to predict whether risks will increase again later on, especially under voluntary covers or through greater use of the vehicle instead of public transport. Clients always have access to out-of-court dispute resolution through customer service departments or the insured party's ombudsman, and can lodge complaints with the state supervisory body (DGSFP, Spain's insurance and pension funds authority) or the relevant regional authority. However, except for insurance with substantial premiums, the cost of seeking judicial protection makes it hardly worthwhile pursuing satisfaction through this route.