Pursuant to Article 813 of the Civil Code otherwise agreed, the premium should be paid at the time the insurance contract is executed and if the contract came into effect before the insurance document was delivered, within fourteen days of delivery.
The premium is calculated for the term of the insurer’s liability. If the insurance relationship expires before the end of the period for which the contract was executed, the policyholder is entitled to reimbursement of the premium for the period during which insurance coverage was not used.
The rule between the cover start period and the first premium payment is significant. In general insurance cover starts from the day following the date the premium or its first installment is paid. Unless otherwise agreed, the insurer’s liability starts from the day following the contract execution date, not earlier, however, than the day following the date the premium or its first installment is paid. If the insurer is liable even before the premium or its first installment is paid and the premium or its first installment is not paid on time, the insurer may terminate the contract with immediate effect and demand payment of the premium for the period during which it was liable. If the contract is not terminated, it expires at the end of the period for which the unpaid premium was due. Furthermore, the premium is calculated for the term of the insurer’s liability. Unless otherwise agreed, the premium should be paid at the time the insurance contract is executed and if the contract came into effect before the insurance document was delivered, within fourteen days of delivery. If the insurance relationship expires before the end of the period for which the contract was executed, the policyholder is entitled to reimbursement of the premium for the period during which insurance coverage was not used.
In Polish law there are no prohibitory legal provisions regarding offering free insurance cover for certain period of time. In fact, free insurance cover period shall be no longer than two or three months (this is a kind of market standard). Longer periods may give rise to tax risks. It may be recognized under tax law provisions as a financial or material benefit for a policyholder.
The basis of an insurer`s liability is the insurance contract concluded between the policyholder and the insurer, in particular the general insurance terms and conditions. Thus, in principle, the starting date of the insurer`s liability shall be determined by an insurance contract and, unless otherwise agreed, the insurer’s liability starts from the day following the contract execution date, not earlier, however, than the day following the date the premium or its first installment is paid. The current legal system provides a business model in which the time from which insurance coverage begins, ie. since when the insurer shall be liable, must not necessarily correspond to the date on which the insurance contract was signed.
In addition, the legislator has introduced a general principle, which makes the beginning of the insurer`s liability dependent on the premium payment by the policyholder. According to the Civil Code article 814 § 1, if the policyholder pays the premium at the same time as the conclusion of the insurance contract, or later, the responsibility of the insurer will begin from the day following the date the premium or its first installment is paid. The premium payment by the policyholder is a condition for the insurer`s liability. The current wording of the Civil Code article 814 § 1 determines that the commencement of the insurance cover is not only related to a total single premium payment, but also its first installment, in case the single premium has been divided into installments, as agreed in the contract.
