Insurance Contract LawLegal Protection and Policyholder Rights
"The Insurance Contract Law (Law 50/1980) regulates all legal relationships between policyholders and insurance companies. This regulation is essential to guarantee that insurers comply with their obligations. At our law firm we are experts in Insurance Law and defend the interests of individuals and companies against insurers that deny coverage or apply abusive clauses.
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What is the Insurance Contract Law?and what is its purpose
The Insurance Contract Law seeks to:
The Law applies to all insurance contracts entered into in Spain, both personal and property. Its fundamental principles are good faith, risk mutuality and protection of the insured as the weaker party in the contract.
Main objectives of Law 50/1980
- Regulate fairly the relationship between policyholder and insurer.
- Protect consumers against abusive practices.
- Guarantee clarity and transparency in contracting.
- Establish the obligations of both parties in case of a claim.
Scope of application and general principles
The Law applies to all insurance contracts entered into in Spain, both personal and property. Its fundamental principles are good faith, risk mutuality and protection of the insured as the weaker party in the contract.
Parties to the insurance contractinsurer, policyholder and beneficiary
Rights and obligations of each party
- The insurer: assumes the risk and must pay the agreed compensation or benefit.
- The policyholder: contracts the insurance and commits to paying the premium.
- The insured: the person exposed to the covered risk.
- The beneficiary: who receives the compensation, especially in life insurance.
Essential concepts
- Premium: price of insurance.
- Risk: uncertain event that, if it occurs, activates coverage.
- Claim: materialization of the insured risk.
Types of insurance regulatedby the Insurance Contract Law
Personal insurance
They protect people against physical or economic damages resulting from illness, accident or death (life, accidents, health).
Damage insurance
They cover material or property losses caused by claims, fires, thefts or negligence (home, car, liability).
Mixed or combined insurance
They include elements of personal and property protection, such as travel insurance or comprehensive business insurance.
Formation and validityof the insurance contract
Formal requirements of the contract and policy
Every contract must be formalized in writing and consist of a policy indicating:
- The contracting parties.
- The insured object.
- The insured sum and premium.
- Duration and general conditions.
Duty to declare the risk
The policyholder is obliged to honestly declare all circumstances that may influence the risk assessment. Hiding information may result in contract nullity.
Duration, renewal and termination
The contract usually renews automatically every year, unless cancellation is notified at least one month in advance by the policyholder or two months by the insurer.
Policyholder rightsagainst the company
Information and transparency
Limiting clauses must be highlighted and expressly signed. If these conditions are not met, they may be considered null.
Compensation for claims
The insurer must compensate within a maximum period of 40 days from notification. In case of delay, default interest of 20% per year may be required after three months.
Deadlines and obligations
The insurer must respond even if the claim is being investigated, except in case of fraud. The insured must report the claim within a maximum of 7 days from when they became aware of it.
Causes of nullityand contract resolution
Lack of truthfulness or fraud
If the policyholder hides relevant information or intentionally lies in the risk declaration, the insurer may cancel the contract.
Non-payment of premium
If the first premium is not paid, the insurance does not take effect. If a subsequent premium is not paid, coverage is suspended after one month of non-payment.
Claims and defenseof the insured
Claim to the insurer
The first step is to submit a claim to the company's own Customer Service Department. They must respond within a maximum period of two months.
Claims before the DGSFP
If no satisfactory response is obtained, you can go to the Directorate General of Insurance and Pension Funds (DGSFP).
Judicial route
In case of persistent refusal, we defend your rights before civil courts to obtain the compensation you deserve.
Role of the lawyerspecialized in insurance
Analysis and assessment
We analyze the policy, assess the claim and verify whether the insurer's refusal or delay is legally justified.
Negotiation and defense
We file the necessary lawsuits against the insurer, claiming the amount due plus legal interest.
Most common casesin which we intervene
Unjustified denial of coverage.
Excessive delays in payment.
Abusive clauses in policies.
Underinsurance or overvaluation.
Life or accident insurance not paid.
Frequently Asked Questions
We answer the most common questions about our legal services. If you don't find the answer you're looking for, don't hesitate to contact us.
Payment plus 20% annual interest can be judicially required.