Premium increase: your special right of cancellation

A premium increase without a corresponding increase in cover triggers a special right of cancellation (Sonderkündigungsrecht). The deadline is short and runs from when you receive the notification – not from the date on the letter. How this works for car insurance with new type classes is shown in the guide Switching car insurance.

The deadline

If the insurer raises the premium without a corresponding change in the scope of cover, you can cancel the contract under § 40 VVG within one month of receiving the notification – with immediate effect, but no earlier than the date on which the increase takes effect. The insurer must inform you at least one month before the increase takes effect.

• Deadline: one month from receipt
• Takes effect no earlier than the increase date
• Notification must arrive one month in advance
• Cancel in text form with proof of receipt

Secure a replacement first

Do not cancel until you know you can get equivalent cover. Acceptance is not guaranteed, particularly if you have previous claims, are older or have particular risks. When in doubt, a gap in cover will cost more than the higher premium.

Not every increase counts

If the premium rises because your cover is also being extended, or because your risk situation has changed, the special right of cancellation does not automatically apply. So check carefully what reason the letter gives.