11. Consequences of not reporting an increase in risk
- Should a loss occur when no declaration of an increase in risk has been made, the insurer shall be released of its obligation to provide benefits if the policyholder of the insurance or the insured has acted in bad faith. Otherwise, the benefits provided by the insurer will be reduced proportionally to the difference between the premium charged and that which would have applied had the true magnitude of the risk been known.
- When there is an increase in the risk during the valid term of the policy giving rise to a higher premium, and when the contract has been cancelled for this reason, if this increase is attributable to the insured, the entirety of the collected premium shall correspond to the insurer. If the aggravating circumstance is the result of causes beyond the control of the insured, the insured shall be entitled to a refund of the portion of the paid premium corresponding to the period yet to elapse.