Can the car insurance company end my insurance contract?

Last week after I found that a mouse or some other wild animal had chewed through half the wires and tubes in the engine while the car was parked over a long period. The cost of repairs was breathtaking (this is a pre-Ford era Jag), so I felt lucky to have gotten comprehensive car insurance. The insurance company paid the claim, but then sent me notice that they were ending my policy.

That is not acceptable! I might have been ok with premiums going up a bit. Can the insurance company quit my policy just because I make a claim? It can't be legal.

Hi there,

In Switzerland, each party to a contract generally reserves the right to withdraw from the contract following a specified notice period. This applies to insurance policies as well, with compulsory health insurance being one of the few exceptions.

As a general rule, insurers can give notice of termination each time that you file a claim and the benefit is paid out. If your insurer deems that you pose too high a risk, they can withdraw from the insurance contract.

In your case, the high cost of the damages and the obvious risk of damage by wild animals in the location where the car is stored likely led your insurance provider to review their relationship with you. In any case, the insurer must deliver the promised benefit before they withdraw from the contract.

A problem here is that once your insurer has withdrawn from your policy, it is unlikely that other insurers will provide you with the same coverage. For this reason, it is important to carefully consider when the cost of damages warrants an insurance claim and when you would be better off paying out of your own pocket.

Best regards from Moneyguru

More on this topic:
Comprehensive car insurance explained
Collision car insurance explained
Car liability insurance explained
Fully-comprehensive car insurance explained