Construction damage insurer and compensation offer

After the 90-day period has expired, the structural damage insurer can no longer contest the amount of its compensation offer

Court of Cassation, Third Civil Chamber, February 16, 2022, No. 20-22.618

A construction company took out two structural damage insurance policies with an insurer. The handover took place with reservations, notably concerning cladding panels covering the facades. A claim was subsequently filed following the collapse of these panels.

The company accepted the insurer's compensation and carried out the necessary repairs. However, considering that the compensation paid improperly included the repair of damage not declared and noted during the acceptance process, the insurer demanded reimbursement of part of the compensation paid and ultimately sued the company, notably on the grounds of restitution of undue payments. The Court of Appeal having ruled in favor of the insurer, the company appealed to the Court of Cassation.

The Court of Cassation overturned the Court of Appeal's decision, citing Articles L. 242-1, paragraph 4, of the Insurance Code and 1235, paragraph 1, of the Civil Code, in its version prior to that resulting from Ordinance No. 2016-131 of February 10, 2016. It held that "it follows from these provisions that the insurer can no longer contest, after the expiration of the ninety-day period, the definition of the work necessary to remedy the declared damages for which it has offered compensation ." Consequently, " the insurer cannot claim the return of compensation allocated by the insured to the execution of the work that this compensation was intended to finance ."

The structural damage insurer must be vigilant regarding the situation of its insured before proposing its compensation offer because it cannot later revise it.