Forfeiture of cover
Loss of the right to be paid for an otherwise covered claim, sanctioning a breach by the policyholder after the event occurred.
Article L. 112-4 of the French Insurance Code: forfeiture clauses must appear in very conspicuous type, and the Cour de cassation treats that as a condition of validity. Article L. 113-2 adds, since the law of December 31, 1989, that forfeiture for late notice requires the insurer to prove it was prejudiced. Forfeiture takes away the indemnity on a loss that was covered, because of a breach after the event: late notice, an inflated claim, evidence not preserved, refusal to cooperate with the adjuster. An exclusion says what was never covered, voidance reaches back to formation of the contract; forfeiture leaves the contract alive and strikes only one claim. Courts review its proportionality, and in liability it cannot be raised against the victim, who is paid, the insurer then turning on its own policyholder.
Article L. 112-4 of the French Insurance Code requires forfeiture clauses to appear in very conspicuous type, and the Court of Cassation treats this as a condition of the clause's validity. Article L. 113-2 adds, since the act of December 31, 1989, that forfeiture for late notice requires proof of prejudice suffered by the insurer.
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