ACL: definition, challenges and operation
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In Switzerland, the Insurance Contract Act (VVG) governs the relationship between insurer and insured for private contracts. This applies in particular to household and third-party liability insurance, but also to supplementary health insurance. Originally enacted in 1908, the law has undergone numerous revisions, most recently in January 2022. As an independent insurance comparator, Comparea helps you better understand the VVG and what it means for policyholders.
What is the VVG?
The VVG is a Swiss regulation created over 110 years ago. One of the aims of the Law on Insurance Contracts is to regulate the relationship between the insurance company and its customer, i.e. the insured. It is therefore essential to ensure that the rights and duties of both parties are respected.
It contains several chapters aimed specifically at protecting the insured against any abuses by the insurance company: lack of information when signing the contract, breach of contract or refusal of compensation for abusive reasons, etc.
In the same way, the LCA protects the insurance company against a breach on the part of the insured: non-payment of contributions, concealment at the time of signing the contract, etc.
What is the purpose of the Insurance Contract Act?
The ICA is to supplementary insurance what the LAMal is to compulsory health insurance. It is therefore indispensable for regulating the private cover offered in Switzerland by insurance companies. It addresses many elements, including:
- The insurance proposal;
- The insurance company's obligation to inform the insured;
- The right to revoke the contract as well as its effects;
- Compensation for damages;
- Renewal of the contract;
- Consequences in the event of breach of contract.
The world of insurance is complex: to make the best choices, the ideal is to be accompanied by trusted experts. Independent comparator, Comparea is not part of any insurance group. We can guide you towards the insurance contract that meets all your needs.
Has the VVG remained the same since 1908?
Today, the Law on Insurance Contracts has little in common with what it was in 1908. Indeed, many of its original aspects are no longer adapted to today's society: the multiplication of insurance organizations, changes in labor and health law, the place of digital technology in finding and taking out insurance, etc.
What's more, early versions of the law had a reputation for favoring insurance organizations too much over policyholders. That was a different era. Over the years, therefore, the LCA law has been the subject of a large number of amendments, often piecemeal: they served mainly to avoid inconsistencies with more recently enacted laws.
But in early January 2022, a completely different project was set in motion. Its aim was to significantly strengthen policyholders' rights, while adapting contractual relations to the particularities of the digital age.
Revision of the LCA law in 2022: what changes does this entail?
On November 11, 2020, the Federal Council approved a major draft revision of the Insurance Contract Act. This therefore came into force on January 1, 2022, bringing the ICA into line with the current context and improving policyholders' rights in many respects. In more detail, find out about the changes brought about by the 2022 revision of the VVG.
The addition of a 14-day cooling-off period for policyholders
For starters, the revision of the VVG adds a right of revocation of 2 weeks (i.e. 14 days) when taking out insurance. For example, if someone insured their car 3 days earlier and has just changed their mind, they can decide to cancel their contract without penalty.
The right to cancel after 3 years, for both policyholder and insurer
At the end of the third year of insurance, it is now possible for both policyholders and insurers to terminate a long-term contract. This means, for example, that a contract concluded for 5 years can still be cancelled after 3 years. However, this right does not allow the supplementary health insurer to terminate the contract after a claim for benefits. Only the insured has the right to do so.
Extension of the limitation period to 5 years (instead of 2 years)
From now on, claims relating to an insurance contract are no longer time-barred 2 years, but 5 years after the claim. The insured can therefore assert his or her rights up to 5 years after the event.
The possibility of cancelling a contract electronically
Today, e-commerce is used in all stages of taking out an insurance policy. However, under the old version of the VVG, a cancellation had to be made by hand. To adapt to modern practices, the revision of the law therefore provides for the possibility of cancelling by e-mail.
How do you take out the right insurance at the best price?
In Switzerland, there are a large number of insurers and multiple coverage offers. So it can be difficult to find the contract best suited to your needs.
Online insurance comparator, Comparea is here to help. We enable you to compares more than 40 companies in record time, so you can demand the best: a transparent, straightforward insurance contract with the best value for money. Our service is completely free, with no obligation and no hidden costs.
Whatever type of cover you're looking for, we'll be able to guide you towards the contract that suits your constraints and preferences.
Updated on: 01.02.2024Written by Alexis MilonHead of health insurance department at Comparea.To learn more about our team click here.