What to do when an insurer refuses or delays your claim

Terms used

• Cláusula limitativa — A cláusula limitativa is a policy clause that restricts your rights; it only binds you if highlighted and specifically accepted in writing.
• Cláusula delimitadora — A cláusula delimitadora defines what the policy covers, such as object, amount, time or place, and needs no separate signature.
• Reclamación — A reclamación is a formal written complaint to the insurer's customer service department.
• Burofax — A burofax is a postal service that proves the content and delivery of a message.
• Consorcio de Compensación de Seguros — The Consorcio de Compensación de Seguros is a state-backed body that covers certain extraordinary events, such as floods or terrorism.

Key rules

• Payment deadline: The insurer must pay the undisputed amount within 40 days of receiving your claim, and late payment without justified cause earns default interest.
• Limiting clauses: A clause that restricts your rights cannot be used against you unless it was highlighted and you accepted it specifically in writing.
• Intentional damage: Only damage you cause on purpose frees the insurer completely.
• Court time limit: You have two years for damage insurance and five years for personal insurance, and a written complaint does not generally restart that time.

An insurer can only refuse for a valid reason in a clear clause

A refusal must rest on a real ground and on wording that is clear. The insurer must also be able to show it followed the rules. If it cannot, you can challenge the refusal.

Grounds an insurer can use

• Intentional damage. If you caused the loss on purpose, the insurer owes nothing. This is the only ground that frees it completely.
• Clauses that limit your rights. A clause that takes away or restricts a right (cláusula limitativa) only binds you if it is highlighted in the policy and you accepted it specifically in writing, usually with a separate signature. The insurer must prove this. A clause that simply defines what is covered (cláusula delimitadora), such as the object, amount, time or place of cover, needs no separate signature. It must still be clear and not hidden.
• Wrong answers on the risk questionnaire. The insurer can cancel the policy within one month of finding out. If a loss happens before it acts, it pays less, in proportion to the premium you paid compared with the correct one. It can refuse fully if the misstatement was deliberate or seriously at fault.
• Unpaid premium. If the first premium is unpaid when the loss happens, the insurer is not liable. If a later premium goes unpaid, cover is suspended after one month. The insurer can cancel after six months.
• Late notice of the loss. Report the loss within seven days. The insurer can claim damages only if the delay harmed it. It can reduce payment if you delayed on purpose or with serious fault.
• Not limiting the damage. You are expected to take reasonable steps to stop the loss getting worse.
• Changes in risk. You must tell the insurer when the risk increases.
• Policy exclusions and underinsurance. Examples are war, wear and tear, and events covered by the Consorcio de Compensación de Seguros. If the insured value is too low, the payout can be reduced.

Deadlines and late-payment interest

The insurer must pay the undisputed amount within 40 days of receiving your claim. If it pays late without justified cause, it owes default interest from the date of the loss. For the first two years, the rate is the legal interest rate plus 50%. After that it is at least 20% a year. The legal rate is set each year, so check the current figure.

An insurer can avoid interest only if it shows justified cause that it did not create itself. A real dispute over whether you are covered is often accepted, but courts read this narrowly. Simply calling a claim "disputed" does not protect it.

What to do after a refusal or delay

1. Ask for the refusal in writing, with the clause or ground it relies on.
2. Compare it with your signed policy. Check whether a limiting clause was highlighted and separately signed.
3. Send a written complaint (reclamación) to the insurer's customer service department (servicio de atención al cliente). Use a method that proves delivery, such as burofax. The department must resolve it within two months.
4. If that fails, you can escalate to the insurance regulator's complaints service or to court.

Watch the time limit for court action. It is two years for damage insurance and five years for personal insurance. A written claim to the insurer does not generally restart that time. A court claim or the insurer acknowledging the debt can interrupt it. Do not wait for the complaint outcome if the deadline is close.

The checklist, documents and warnings below show what to gather and what to avoid.

Timeline and deadlines

• Tell your insurer about the loss: within seven days of learning of it, unless your policy gives a longer period

• Default interest starts to run if nothing is paid without justified cause: once three months pass after the loss, counted from the date of the loss

• Insurer ends the policy or reduces payment over a risk misstatement: the insurer can rescind within one month of learning of it

• Cover is suspended, then can be cancelled, if a later premium is not paid: suspended after one month, cancellable after six months

• Send a written complaint to the insurer's customer service after a refusal: as soon as you receive the refusal

• Customer service must resolve your complaint: within two months of receiving it

Documents you need

• Your full policy, including the special and general conditions, as signed. You need it to see which clause the insurer relies on and whether you signed it separately.

• The insurer's refusal or reduction decision in writing, with the clause or ground it gives.

• The risk questionnaire you answered when taking out the policy, if the insurer says you misstated the risk.

• Your written complaint (reclamación) to the insurer's customer service department, sent in a way that proves delivery, such as a burofax.

What to watch out for

• A refusal based on a clause you never signed separately: An insurer can lose the right to use a clause that limits your rights if it was not highlighted and accepted by you in writing, usually with a separate signature. Accepting the refusal at face value can cost you a valid claim. Ask for the policy and check whether the clause is highlighted and signed by you. The insurer has to prove it met these requirements.

• Late notice of the loss: If you report late, the insurer can claim damages only if the delay hurt it, and can reduce payment if the delay was intentional or seriously negligent. Report within seven days of learning of the loss, and take reasonable steps to limit the damage.

• Wrong answers on the risk questionnaire: If the insurer finds you misstated the risk, it can end the policy within one month of learning of it. If the loss happens first, it can cut payment in proportion to the premium you paid, or refuse fully if the misstatement was wilful or seriously negligent. Answer the questionnaire accurately and tell the insurer when the risk grows, for example after works or a change of use.

• Unpaid first premium: If the loss happens before you pay the first premium, the insurer is freed from paying. Later unpaid premiums suspend cover after one month. Pay the first premium before relying on the cover, and keep proof of every payment.

• Missing the time limit for court action: Court claims expire after two years for damage insurance and five years for personal insurance. A written complaint does not generally restart that period. Send your complaint quickly, and take legal advice well before the limit if the insurer keeps refusing.

• Intentional damage excuses the insurer fully: If you caused the loss on purpose, the insurer owes nothing, and no clause can change that. Other exclusions, such as war or wear, also apply. Read the exclusions in your policy before you claim, and check whether the Consorcio de Compensación de Seguros, a state body that covers certain extraordinary events, deals with your type of loss.

Frequently asked questions

What is the difference between a clause that limits my rights and one that defines my cover?

A clause that limits your rights removes or restricts a right after the risk is already defined, while a clause that defines your cover sets the object, amount, time or place of the risk itself. Only the first kind needs to be highlighted and signed by you separately. For example, an exclusion that empties the cover of content counts as limiting.

How much interest does the insurer owe if it pays my claim late?

In the first two years the interest is the legal interest rate plus 50%, and after that it is at least 20% per year. It runs from the date of the loss and continues until the insurer pays. The legal rate is set each year, so ask what it is for the year of your loss.

Can the insurer avoid paying interest by saying the claim is in dispute?

Only if it shows a justified cause that it did not create itself. A genuine dispute over cover that needs a court decision is often accepted as justified cause, but courts read this narrowly. A weak or late refusal does not stop interest running.