Due to the specific characteristics of the insurance contracting process, the law allows the contract to be cancelled after it has been signed, provided this is done within certain deadlines and under certain conditions. This legal mechanism is known as the right of withdrawal and is included in Royal Legislative Decree 1/2007 of 16 November.
What Is the Right of Withdrawal?
This right is intended to protect consumers against possible dissatisfaction with purchases where they do not have physical access to the product or service at the time of the transaction, as is the case with insurance.
The law recognises the client’s right to terminate an insurance contract unilaterally and without penalty, provided this is communicated:
- Within 14 calendar days in the case of non-life insurance.
- Within 30 days if the contract is for life insurance.
How Can the Right of Withdrawal Be Exercised?
When the contract is signed, the insurance company is obliged to inform the client of the right to unilateral termination and of the applicable deadline. Although there is no mandatory formula, this information is usually provided when the transaction is completed.
It is important to stress that the consumer is not required to give reasons justifying the decision and that no penalties or additional costs should be paid in order to terminate the contract.
Once the insurer has been informed of the intention to cancel the contract, it must refund the money within 14 calendar days of the notification. Otherwise, it may have to pay twice the amount and may also be subject to a claim for damages.
Conclusion
In short, the right of withdrawal protects users against possible dissatisfaction after signing a contract.