Implications of the right of insurers to request information from policyholders regarding an accident

• The right of insurers to request information from policyholders about a claim, provided for in the Insurance Contract Law (LCS), allows them to investigate the circumstances of claims without clear limits as to timing or frequency, which may generate legal uncertainty for policyholders.
• Although the courts have indicated that this power must be exercised in a reasonable and proportionate manner, the lack of precision in the LCS regarding the time limit for resolving claims or requesting information leaves room for possible abuses and affects the legal certainty of users.

In recent times, the need for protection of our person and property has been increasingly reflected. As an example, we remember the unfortunate catastrophe that occurred in Acapulco, Guerrero, which devastated the tourist center and left many of its citizens, businessmen and even the government itself in a state of defenselessness; this, due to the fact that most of them did not have a response plan for this contingency.

For this reason, it is important to generate a culture to safeguard personal and material integrity by taking out insurance. For this reason, the insurance sector offers multiple services with the purpose of insuring life, health, property, assets, among other issues. However, the regulations relating to this sector still present various gaps and inconsistencies that have not been resolved.

Specifically, the Insurance Contract Law (“LCS”) regulates the procedure to be followed in the event of an accident. First, before the insurer determines whether payment of the insured sum to the user is appropriate or inappropriate, the LSCS establishes a power in favor of insurers to require from the insured or their beneficiaries any type of information on facts related to the accident by which the circumstances in which it occurred can be determined; however, to what extent does this power cover?

The fact is that the article relating to this right does not establish any type of limit or time frame for requesting information from its insured, that is, it leaves the way open for the insurer to request information relating to the accident as many times as necessary, without any type of sanction or limit established in the legal norm.

The above could generate legal uncertainty for users of insurance companies, especially due to the time they have to take action against them. In the case of property insurance, they have a time limit of two years to claim the insured amount and in the case of death coverage in life insurance, it is five years.

In addition to the above, a comprehensive reading of the LCS reveals various causes that authorize the insurer to terminate the Insurance Contract in question and to void its obligations to the insured in the event of any omission or inaccurate declaration of information at the time of contracting the insurance. This is because insurers calculate the risks based on the declarations of the insured and thus offer specific coverage for each user and the amount of the premium.

At the time of an accident, it is the responsibility of the insurance company to investigate, through its collaborators, the specific circumstances that led to the accident. However, this does not mean that insurers have an absolute right to ask the insured for any kind of information without limit.

In recently issued judicial criteria, the Collegiate Courts have determined that the investigation of information is carried out by insurance company professionals to determine the circumstances relating to the accident, but from a rational, adequate and appropriate requirement for the specific case. This does not mean that the burden of proof is transferred to the insured to obtain an effective claim against the insurer, much less that it is the responsibility of the insured to provide information that allows the insurance company to discharge its obligations.[1]

For its part, the First Chamber of the Supreme Court of Justice of the Nation had interpreted that this power in favor of insurers does not violate the right to equality because by establishing that the insurance company can disclaim its obligations in the event that a false statement is proven, it attributes the burden of proving the bad faith of the insured to the insurance company and thus overturns the presumption of good faith.[2]

However, it is considered that this power is closely related to the inaccuracy of the LCS regarding the time limit that an insurance company has to decide on the admissibility or inadmissibility of a claim. This omission in the regulation could generate uncertainty for the insured, since the power to request information related to the accident also has no limit and the insurance company can request said information as many times as it considers necessary to relate the circumstances of the accident.

Author: Ivan Castelan C.

[1] See the thesis under the heading “INSURANCE CONTRACT. THE INSURANCE COMPANY'S POWER TO REQUEST INFORMATION ON THE CIRCUMSTANCES RELATING TO THE ACCIDENT DOES NOT ALLOW THE BURDEN OF PROOF TO BE TRANSFERRED TO THE BENEFICIARY.” and digital registration number 2028776.

[2] See the thesis heading: “INSURANCE CONTRACT. ARTICLE 70 OF THE RELATIVE LAW DOES NOT VIOLATE THE RIGHT TO EQUALITY.” and digital registration number 2017154.