INSURANCE, FINANCE AND ENERGY
Subscription date and effective date of a contract: what are the differences?
Most of the time, when a contract is taken out, it also sets the expiration date, the effective date of the guarantees becoming effective upon the formation of the contract, ie from its subscription date. However, it is possible to separate these three dates for several reasons, whether it is a car, home or otherinsurance contract.
The effective date of an insurance contract is not always immediate
For the vast majority of insurance contracts, whatever they are, the subscription date is at the same time the one serving as the basis for the renewal of the contract after payment of the contribution as well as the effective date of the guarantees.
However, certain situations may require postponing either the expiry date or the date on which the guarantees will take effect. Here are some concrete examples:
This delay may be imposed by the insurer, which conditions, for example, the guarantees on the installation of an alarm device or the upgrading of certain installations.
The insured may also request a delay in the effects of the guarantees, an example being the acquisition of a home which will not be effectively vacated by the former owners until a specific date.
A car that cannot be delivered until several months later may be covered by a contract taken out at the time of the order, but which will not take effect until the scheduled delivery date.
The due date accompanied by the payment of the premium may just as well be postponed by the insured depending on the inflow of money on a specific date. The insured then agrees to pay the amount of the premium on the due date.
Whether for the effective date or the expiry date, these provisions must be indicated in the contract. The insurer can also refuse these accommodations.
What is the effective date of a cancellation or termination of an insurance contract?
Even postponed, the expiry date is generally that of a possible termination. The subscription date is in fact only the date specifying the starting point of the contract. In all cases, the date of tacit renewal must be specified in a clause of the contract. It is at the latest fifteen days before this date that the insured must be informed of the next due date according to the Chatel law.
The part of the Hamon law on infra-annual termination, however, facilitates termination since it is now possible at any time of the year as long as the contract is over 12 months old. If the insured opts for a delayed effective date of the guarantees, he must be aware that he is not covered before the guarantees are actually activated, regardless of the date of subscription of the contract.