Expert advice: …on rate surcharges

Mr. Fiala, those who pay their insurance premiums in installments can claim money back. Why?

If the insurer does not show an effective interest rate, it may collect a maximum of four percent. Some take more, but in doing so they are in effect giving a consumer credit. If a customer pays a five percent installment surcharge, this corresponds to an effective interest rate of 11.35 percent per year. If the insurer has not informed the insured about the right of revocation for consumer loans, insureds revoke contracts from 1991 onwards for an unlimited period of time – this also applies to terminated contracts.


How much does a revocation bring?

If a customer has paid 500 euros a month including a five percent installment surcharge for an endowment life insurance policy since 1991, he could reclaim almost 4000 euros plus interest. The consumer advice centre in Hamburg offers a sample letter online.


So what’s the catch?

The Federal Court of Justice has only issued an acknowledgement judgement (I ZR 22/07); the reasons for the judgement of the first instance apply. For insurers, billions are at stake. Many refuse to pay voluntarily. Who wants back installment surcharges or by revocation a reversal strives, must probably complain – that is expensive and can last.

Dr. Johannes Fiala

by courtesy of (published in Wirtschaftswoche 08/2010, page 107)

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About the author

Dr. Johannes Fiala Dr. Johannes Fiala

Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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