REFUSAL OF COMPENSATION IN CASE OF THEFT OF THE VEHICLE PURCHASED IN CASH
At the time of the conclusion of the insurance contract your insurer completely makes fun of the way you bought your vehicle. In cash, by bank transfer or check. This question is never asked to the policyholder.
On the other hand, this question begins to excite insurers at the time of theft of the insured property.
Questions abound…The insurer will bombard you with emails asking you to justify at all costs by what means you bought your property. Bank statements are requested, photocopies of checks, dealer invoices are scrupulously studied etc. Some insurers do not even hesitate to ask you about the origin of the funds (inheritance, salary, donation, etc.).
Even worse, it often happens that part of the purchase, or even the whole, is paid in cash by the insured. Some insurers immediately use it to refuse insurance coverage on the grounds that you have committed a violation of the mandatory provisions of the Monetary and Financial Code.
The insurer is not entitled to refuse the insurance guarantee on the grounds that the vehicle was purchased in cash
The insurance contract is a membership contract par excellence. The individual insured has no way of discussing the clauses proposed by the insurer which is in a strong position both at the time of conclusion of the contract and at the time of settlement of the claim. Natural persons are often willing to provide their insurer with all the information and details and circumstances about the purchase of the vehicle in the hope of finally being compensated.
You should know that not all questions are allowed. Insurers are not allowed to ask you for information that is not related to the insured risk or the terms of the insurance policy.
In practice, things are different. The formula often used by insurers is to say that “the value of the vehicle would not be established due to payment of the price in cash”.
In fact, your insurer has absolutely no right to object to the refusal of insurance coverage for the purchase of the vehicle in cash.
Of course, if you do so, you are commenting on an infringement of the legal provisions of article L. 112-6 of the Monetary and Financial Code that limit cash payment between individuals and professionals to the maximum amount of 1.000 euros.
However, you should be aware that it is not the insurer’s responsibility to sanction you for this offence. The latter is not the guardian of compliance by litigants with the regulations on the prohibition of cash payment of certain claims.
When the reality of the loss (theft of the vehicle) is established and is not disputed, the insurer must pay you the insurance compensation
Your criminal complaint for theft has been filed. The reality of the claim is not disputed by the insurer. The latter owes his guarantee without being able to oppose the refusal of compensation for cash payment.
It is necessary to know that the proof of the reality of the disaster is free. You only need to demonstrate that the price of the vehicle has actually been paid. To do this, ideally, it is necessary to keep proof of the withdrawal of money. If you have not kept the ticket from the distributor, you probably have bank statements or the withdrawal necessarily appears. You can also present to the insurer a debt recognition if the car was purchased by means of a loan from a friend. Any evidence is admissible and may be rejected by the insurer.
All means of proof are acceptable without your insurer being able to impose a particular proof on you (bank transfer justifying the sale, for example).
The jurisprudence of the French courts is favourable to insured persons on this point.
For example, a court ruled that the payment of compensation due in the event of vehicle theft is not subject to the obligation of the insured to justify the purchase price as long as the insurance contract stipulates that the insurer pays compensation equal to the “defined replacement value to be said to be expert”.
That is, it does not matter that your car was bought in cash. As soon as it has a market/asset value that can be determined by the expert by reference to the car of the same make, of the same year of manufacture with the same mileage, the insurer can not impose on you the obligation to justify the purchase price and the way in which you paid it (transfer, check or cash).
It should therefore be remembered that the amount of the purchase invoice (or the means by which you paid it to the seller) does not matter because compensation is made by reference to the replacement value in most insurance policies.
In case of doubt about the origin of the funds used for the purchase of the vehicle, the insurer must notify the relevant financial authorities …and not refuse compensation
It happens that the insurer refuses to compensate you for the theft of your vehicle on the grounds that the cash payment makes the origin of the funds suspicious and that it is for him to fight money laundering.
This argument is totally inoperative.
Be aware that the courts are supportive of you on this point. Thus, the judges consider that if the insurer wishes to prevent the risk of money laundering it is up to the insurer to notify the competent anti-money laundering authorities.
Failing to do so, he will not be able to refuse you the payment of the insurance compensation on the grounds that your purchase was paid in cash or that you do not justify the origin of the funds used to acquire it.
That is, the insurer can not impose a penalty against you that will be the refusal of compensation. It is for the competent authorities to do so, where appropriate, through the sanctions provided for in the Monetary and Financial Code. Let’s not mix “the registers”.