An insurer’s royement is one of the most drastic measures an insurer can take. The insurer terminates your policy; you lose your coverage and the registration that accompanies this can haunt you for years.
Many policyholders only realize how far-reaching the consequences are when they try to take out a new insurance policy and are refused everywhere. In this article you will read what royement precisely entails, what the consequences are and which steps you can take to improve your situation.
What is royement of an insurance?
Royement of an insurance means that the insurer terminates your policy unilaterally. This is something
Different from a regular cancellation. In the case of royement the insurer ends the insurance because of a specific reason, such as suspected fraud, breach of the duty to disclose (mededelingsplicht) or repeatedly failing to pay premiums.
The insurer records the reason for the royement and this can affect your ability to take out insurance in the future. There are different forms of royement.
The most severe type is royement due to fraud or irregularities. This usually leads to a registration in the Extern Verwijzingsregister (EVR) and in the insurer’s internal incident register. Royement due to non-payment is less severe but also has consequences for your insurance history.
Reasons for royement of your insurance
An insurer can royer your insurance for various reasons. It is important to know which grounds exist for a royement so that you can assess whether the royement is justified in your case.
Royement due to fraud
If the insurer determines that you have committed fraud, this can lead to the immediate royement of your insurance. This includes deliberately providing incorrect information in a claim, exaggerating the damage or faking an incident of damage.
Royement due to fraud has the most severe consequences and is almost always accompanied by a
registration in the EVR.
Royement due to breach of the duty to disclose (mededelingsplicht)
If it appears that you omitted relevant information when taking out the insurance, the insurer can terminate the policy. The duty to disclose (mededelingsplicht) obliges you to answer all questions honestly and completely when applying. Breach of this duty can, depending on the severity, lead to royement.
Royement due to non-payment
Failure to pay premiums is a common reason for royement. However, the insurer must first give you the opportunity to pay the outstanding amount. Only after a reminder and the expiry of a reasonable payment period may the insurer royer the policy due to non-payment.
Consequences of royement of your insurance
The consequences of royement of an insurance reach much further than the loss of your current
coverage. The royement can affect your financial future for years.
Loss of insurance coverage
The most direct consequence is that you are no longer insured. For a car insurance policy this means you may no longer drive, because a WA (third-party liability) insurance is legally required. For health insurance, royement can lead to problems accessing care. If you have a home insurance, you run the risk of bearing the full cost yourself in the event of fire or burglary.
Registration in the Centraal Informatiesysteem
When a royement occurs the insurer registers the termination and the reason for it in the Centraal Informatiesysteem of Stichting CIS (CIS). Other insurers consult this system when you want to take out a new insurance. A registration due to fraud or irregularities is a serious signal that can lead insurers to refuse you.
Registration in the Extern Verwijzingsregister
In the case of royement due to fraud or serious irregularities the insurer can also register you in the Extern Verwijzingsregister (EVR). This register is shared by all affiliated financial institutions, not only insurers but also banks.
An EVR registration can remain for a maximum of eight years and has major consequences for your ability to obtain financial products. This affects not only insurances but can also lead to problems with banks.
Difficulties in taking out new insurance
After a royement it is often difficult to take out a new insurance. Insurers are reluctant to accept policyholders who have previously been royed. If you are accepted, this is usually at a substantially higher premium and with restrictive conditions. With an EVR registration it can happen that no insurer wants to accept you.
What can you do after royement of your insurance?
A royement feels definitive, but there are possibilities to improve your situation. It is important to act quickly, because the longer you wait, the harder it becomes to undo the consequences.
Check whether the royement is justified
The first step is to check whether the insurer carried out the royement on proper grounds and in the correct manner. The insurer must meet certain conditions before it may royer a policy.
In the case of royement due to non-payment the insurer must have sent you a reminder with a reasonable payment term. In the case of royement due to fraud there must be sufficient evidence for the accusation. If the insurer did not comply with the rules, the royement may be invalid.
Object to the registration
If you believe that the registration in the CIS or the EVR is unjustified, you can object to the insurer. You can request the registration be removed or that the registration period be shortened. If the insurer rejects your objection, you can file a complaint with the Kifid or start proceedings in court. (Kifid = Klachteninstituut Financiële Dienstverlening, the Dutch Financial Services Complaints Institute)
Find an insurer that will accept you
Not all insurers apply the same acceptance policy. Some insurers are willing to accept policyholders who were previously royed, albeit under certain conditions. An independent insurance advisor can help you find an insurer willing to accept you. For legally mandatory insurances, such as WA motor insurance, an acceptance obligation (acceptatieplicht) applies for the designated insurer.
Challenge royement at Kifid
The Klachteninstituut Financiële Dienstverlening (Kifid) handles consumer complaints against insurers. If you believe the royement is unjustified or that the insurer acted disproportionately, you can file a complaint with Kifid. The disputes committee assesses whether the insurer acted correctly and can require the insurer to reverse the royement or remove the registration.
Challenge royement in court
If Kifid does not provide a solution or if you prefer a judicial decision, you can start proceedings at the court. The judge assesses whether the royement was lawful, whether the insurer acted proportionately and whether the registration in the CIS or EVR is justified.
In case law there are regularly cases in which judges have ordered registrations to be removed or shortened because the insurer’s measures were disproportionate to the irregularity found.
Royement and the consequences for your family
An aspect that is often overlooked is that the royement of your insurance can also affect your family members. For many insurances, such as personal liability insurance and household contents insurance, family members are co-insured. If the insurer royers your policy, your partner and children also lose their coverage. This can be particularly problematic because the reason for the royement lies with you, but the consequences also affect family members who are not at fault.
Moreover, a registration in your name can affect your family members’ possibilities to take out insurance at a joint address. Some insurers are reluctant to accept insurance if one of the residents at the address is registered in the EVR. It is therefore important, when challenging a royement, to also consider the interests of your family members.
Difference between royement and a regular cancellation
It is important to know the distinction between royement and a regular cancellation of the insurance. In a regular cancellation the insurer terminates the policy for example because it stops offering a particular product or because the policy is not renewed at the end of the contract period.
A regular cancellation typically has no negative consequences for your insurance record and does not lead to a registration in the CIS or EVR. Royement, on the other hand, is a termination on the basis of a specific reason related to you. The reason is recorded and is visible to other insurers.
The difference is of great practical importance: after a regular cancellation you can usually take out a new policy without problems, whereas after a royement you may face significant obstacles.
The impact on your daily life
The royement of your insurance not only affects your financial situation but can also influence your daily life. If you do not have car insurance, you cannot drive. If you do not have liability insurance, you face a great risk if you accidentally cause damage. If you lack household contents insurance, you are on your own in the event of theft or fire. These practical consequences make it all the more important to take swift action after a royement.
Subsidised legal aid for royement
Challenging a royement or a registry entry does not have to be unaffordable. If your income is limited, you may be eligible for a subsidie (toevoeging) via the Raad voor Rechtsbijstand (Legal Aid Board). With subsidised legal aid you pay only a limited personal contribution and the government covers the majority of the lawyer’s costs. This also makes it possible for people with a limited budget to legally contest an unjust royement.
Preventive measures to avoid royement
Prevention is better than cure. There are various steps you can take to prevent your insurer from royering your policy. Always pay your premiums on time and contact your insurer immediately if you have payment problems to arrange a solution. When filing claims, always be honest and complete in your statement. Do not exaggerate the damage and mention all relevant circumstances, even if you think they might be detrimental to you.
It is also wise to contact your insurer or advisor if you are unsure about the scope of your coverage before submitting a claim. In this way you prevent misunderstandings that could later be considered irregularities. Always keep copies of all correspondence, claim reports and policy documents so that, in the event of a dispute, you can demonstrate that you acted correctly.
Take action against an unjust royement
A royement of your insurance does not have to be the end of the story. With the right legal assistance you can challenge the royement, have registrations removed and restore your insurance opportunities. It is important to act quickly, because the longer a registration remains, the harder it becomes to undo the consequences. Have you been confronted with the royement of your insurance and do you want to know what you can do?
Contact us for a non-binding assessment of your situation. Our lawyers are
specialised in insurance law and will help you protect your rights. Together we will see whether the royement is justified and which steps you can take to improve your position.
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