My risk has gone down: can my premium go down too?

Premiums rise by themselves; falling has to be asked for

Almost everyone knows you must tell the company when the risk increases: a renovation, a new use for the premises, an added driver. What is mentioned far less is that the symmetry exists, and that the law expressly recognises it.

If the risk falls, there is a right to a lower premium. But it does not happen on its own: it has to be reported to the insurer.

What the law says

The policyholder or the insured may report, during the contract, circumstances that reduce the risk, provided they are such that, had they been known when the contract was made, it would have been concluded on more favourable terms.

Once reported, at the end of the current premium period the future premium must be reduced in the corresponding proportion. The reduction works forward, not over the year already paid.

And there is a consequence that acts as leverage: if that reduction is not applied, the policyholder is entitled to terminate the contract and be refunded the difference between the premium paid and the one that should have applied from the moment the reduction was reported. In other words, the date of the notice sets the starting point.

What usually counts as a reduction in risk

The law gives no list, because it depends on what influenced the price in each policy. In practice these are changes that, in the original questionnaire, would have led to a better rate.

In home insurance, fitting a monitored alarm, reinforcing the door, or no longer keeping a high-value item that was declared at the time. In life, giving up smoking where smoking was declared and loaded the premium, or stopping a declared hazardous activity. In commercial policies, removing an installation or ceasing a secondary activity riskier than the main one.

What the law does not do is guarantee an automatic fixed discount: it speaks of a reduction in the corresponding proportion, which is a technical calculation and depends on how much that circumstance weighed in the rate.

An example

A home was insured with no alarm and the questionnaire asked about it. Two years later a monitored alarm is installed. The policyholder reports it in writing in March.

At the end of the current period, the next premium must be reduced in the corresponding proportion. If it is not, the policyholder may terminate the contract and claim the difference counted from March, when the notice was given.