French court rules insurance exclusion clause referencing road code does not apply outside traffic, forcing payout of over €700k
Executive summary: A French court held that an insurance exclusion clause referring to the road code is ineffective for accidents occurring off public roads, ordering the insurer to pay more than €700,000 to the heirs of a woman who died in a fall while intoxicated. The ruling restricts insurers' ability to deny claims based on such exclusions, potentially affecting underwriting practices, pricing, and regulatory oversight in the French insurance sector.
Who is involved: The unnamed insurer, the beneficiaries of the deceased woman, and the French court that issued the judgment.
Likely next: Insurers may reassess and revise exclusion clauses in their policies, the French prudential regulator could issue guidance on permissible clauses, and similar cases may emerge testing the scope of the decision.
The court determined that an insurer cannot rely on a clause that excludes coverage when the incident is linked to the highway code if the event occurred off public roads. Consequently, the insurer must compensate the beneficiaries of a woman who died in a fall while intoxicated. The decision clarifies the limits of contractual exclusions in French insurance law and may prompt a review of similar clauses across the market.
Timeline
- — Assurances : une clause d’exclusion faisant référence au code de la route ne s’applique pas hors circulation (Le Monde — Économie)
Analysis — what this means
Likely next events
- Insurers may submit updated policy terms to the ACPR by Q4 2026 to comply with the ruling.
- The French Autorité de Contrôle Prudentiel et de Résolution (ACPR) could publish guidance on exclusion clause validity by end 2026.
Sectors affected
- insurance
- auto liability insurance
Regulatory implications
- ACPR may review exclusion clause standards under the French Insurance Code to ensure compliance with the court's interpretation.
- EU Solvency II risk assessments may need to incorporate national case law on contractual exclusions.