Civil Law and Bad Faith Insurance Claims in Europe

1. Introduction

Bad faith insurance claims arise when an insured person, beneficiary, insurer, broker, or other party allegedly acts dishonestly or abusively in connection with an insurance contract.

The concept can operate in several different ways:

the insured deliberately exaggerates a loss;

the insured invents or fabricates a claim;

the insured conceals material facts when obtaining insurance;

false documents are submitted;

the insurer relies on a fraud allegation without sufficient proof;

an insurer improperly refuses a genuine claim;

an insurer relies on an exclusion or forfeiture clause in an abusive manner;

the parties deliberately manipulate evidence or valuation.

European law does not have one uniform “bad faith insurance law.” The precise consequences differ between jurisdictions. France, Germany, Italy, Spain, England and Wales and other European systems use different statutory and contractual doctrines.

A common civil-law theme, however, is that good faith, contractual performance, proof of fraud, proportionality and the precise wording of the insurance policy are central.

Recent French case law illustrates this particularly clearly: the French Cour de cassation held in February 2026 that where a policy contains a sufficiently apparent forfeiture clause for false statements about the consequences of a loss, and the insurer establishes the insured's bad faith, the forfeiture is not disproportionate merely because it affects the contractual coverage. (Cour de Cassation)

2. Meaning of Bad Faith in Insurance

Bad faith generally involves conduct going beyond an innocent mistake.

Good-faith error

An insured says:

“The property was worth €100,000.”

but genuinely and reasonably believes this to be true.

This is normally different from fraud.

Bad-faith claim

The insured knows that the property is worth €60,000 but deliberately claims:

“The property was worth €100,000”

in order to obtain a larger payment.

The second situation can constitute fraudulent or bad-faith conduct.

Therefore:

mistake ≠ negligence ≠ bad faith ≠ fraud, although the exact boundaries depend on national law.

3. Main Forms of Bad Faith Insurance Claims

A. Fraudulent claim

The insured intentionally submits a false claim.

Examples:

claiming for property that never existed;

exaggerating damage;

submitting forged invoices;

claiming a fabricated theft;

concealing the fact that the insured property was already damaged.

B. Fraudulent exaggeration

The underlying accident is genuine, but the amount claimed is deliberately inflated.

Example:

Actual repair cost = €20,000

Claim submitted = €60,000

The legal question becomes whether the inflation was:

accidental;

negligent; or

deliberate and dishonest.

C. False declaration when obtaining insurance

The applicant deliberately conceals a material fact when applying for insurance.

Examples:

previous claims;

dangerous activities;

previous losses;

medical information where legally relevant;

construction defects;

use of insured property.

D. Bad-faith refusal by insurer

Bad faith can also be alleged against the insurer.

For example, an insurer might allegedly:

deliberately delay a legitimate claim;

ignore evidence;

manufacture a reason for refusing coverage;

rely on an exclusion it knows does not apply;

improperly undervalue the loss.

However, the legal standard for an insurer's bad faith varies considerably between European jurisdictions.

4. Good Faith as a Contractual Principle

Insurance is fundamentally contractual.

Civil-law systems commonly impose a requirement that contracts be performed in good faith.

In France, for example, Articles 1103 and 1104 of the Civil Code are particularly important:

Article 1103 gives binding force to contracts;

Article 1104 requires contracts to be negotiated, formed and performed in good faith.

The French Cour de cassation expressly relied on these provisions in its February 2026 insurance decision. (Cour de Cassation)

The general principle can therefore be represented as:

Insurance contract → contractual obligations → good-faith performance → truthful claims → honest cooperation.

5. Burden of Proof

One of the most important issues in bad-faith insurance litigation is:

Who must prove the insured's bad faith?

In many European systems, an insurer seeking to impose a serious fraud-related contractual consequence must establish the facts supporting that consequence.

French jurisprudence is particularly clear on this point.

The French Cour de cassation has repeatedly held that the insurer must establish the insured's bad faith when relying on a policy clause forfeiting coverage because of false statements concerning a loss. (Cour de Cassation)

Therefore:

False statement alone ≠ automatically bad faith.

The insurer may need to demonstrate:

falsity;

materiality where required;

intentional or bad-faith conduct;

applicability of the contractual clause; and

compliance with formal requirements.

6. Case Law 1 — Cour de cassation, 12 February 2026

Cour de cassation, 2e chambre civile, 12 February 2026, No. 24-18.594, ECLI:FR:CCASS:2026:C200133

This is a particularly important recent French authority.

The insured had made false statements concerning the consequences of an insurance loss.

The insurance policy contained a forfeiture clause for false declarations.

The lower court considered that applying forfeiture to the whole contractual loss would be disproportionate.

The Cour de cassation disagreed.

It held that where:

the contract contains an appropriately presented forfeiture clause;

the insured made false statements in bad faith; and

the clause applies to those statements,

the forfeiture is not necessarily disproportionate merely because it affects the broader insurance coverage.

The Court relied upon Articles 1103 and 1104 of the Civil Code. (Cour de Cassation)

Principle

Bad-faith false statements can justify contractual forfeiture where the policy validly provides for that consequence.

Importance

This demonstrates that good faith operates in both directions:

the insured must act honestly;

the insurer must respect the contract and its limits.

7. Case Law 2 — Cour de cassation, 15 December 2022

Cour de cassation, 2e chambre civile, 15 December 2022, No. 20-22.836, ECLI:FR:CCASS:2022:C201314

The insured had made bad-faith false statements concerning the consequences of the loss.

The policy contained a forfeiture clause.

The Cour de cassation confirmed that the insurer could rely upon the forfeiture provision once the insured's bad faith had been established.

The Court rejected the argument that the forfeiture itself was disproportionate. (Cour de Cassation)

Principle

Where a properly incorporated insurance clause provides for forfeiture for bad-faith false statements, the court can enforce the contractual sanction.

Significance

The case shows the difference between:

mere inaccurate information

and

deliberately false information made in bad faith.

8. Case Law 3 — Cour de cassation, 5 July 2018

Cour de cassation, 2e chambre civile, 5 July 2018, No. 17-20.488

This is an important authority on the burden of proof.

The insurer attempted to rely upon a clause providing for forfeiture following false declarations concerning a loss.

The Cour de cassation held that:

the insurer must establish the insured's bad faith.

The mere existence of an inaccurate statement was insufficient. (Cour de Cassation)

Principle

The insurer cannot automatically transform an innocent error into insurance fraud.

Example

If an insured accidentally reports an incorrect vehicle mileage, the insurer must still establish the necessary bad-faith element where the policy requires it.

9. Case Law 4 — Cour de cassation, 5 July 2018, No. 17-20.491

Cour de cassation, 2e chambre civile, 5 July 2018, No. 17-20.491

This decision similarly concerned false information supplied in connection with an insurance claim.

The lower court had treated the inaccurate information as sufficient without properly establishing the insured's bad faith.

The Cour de cassation rejected that approach.

The insurer was required to establish bad faith before relying upon the forfeiture clause. (Cour de Cassation)

Principle

A contractual fraud/forfeiture provision does not eliminate the legal requirement to establish the necessary mental element where the applicable law requires it.

10. Case Law 5 — Cour de cassation, 21 November 2013

Cour de cassation, 2e chambre civile, 21 November 2013, No. 12-15.888

This case concerned a stolen vehicle and alleged false information concerning its value and circumstances.

The insurer relied upon a contractual forfeiture clause.

The dispute included whether the insured had deliberately sought a greater indemnity by making inaccurate statements.

The case demonstrates the importance of examining:

the precise statement;

whether it was actually false;

whether it concerned the consequences of the loss;

whether the insured knew it was false;

whether the contractual forfeiture provision covered that conduct.

(Cour de Cassation)

Principle

Courts must establish the factual foundation for bad faith rather than simply infer fraud from suspicious circumstances.

11. Case Law 6 — Cour de cassation, 23 May 2013

Cour de cassation, 2e chambre civile, 23 May 2013, No. 12-19.952, ECLI:FR:CCASS:2013:C200783

This case concerned an insurer's attempt to invalidate an insurance contract because of an alleged intentional false declaration concerning the insured building.

The issue was whether the insured deliberately misrepresented the construction date in order to alter the insurer's assessment of the risk.

The Cour de cassation emphasised that the insurer must prove the required bad faith and intention to mislead concerning the risk. (Cour de Cassation)

Principle

For pre-contractual misrepresentation, an inaccurate statement is not automatically fraudulent.

The insurer must establish the legally required intentional element.

12. Case Law 7 — Cour de cassation, 18 October 1978

Cour de cassation, 1re chambre civile, 18 October 1978, No. 77-10.063

This older case concerned non-disclosure of a previous insurance loss.

The insurer sought to invalidate the insurance contract on the basis of bad-faith non-disclosure.

The Cour de cassation held that the court had to determine not merely whether the information was deliberately omitted, but also whether knowledge of the omitted fact would have been capable of changing the insurer's assessment of the risk. (Cour de Cassation)

Principle

Bad faith and materiality are distinct questions.

A claimant may have concealed information, but the court must still examine whether that information was legally significant to the insurance risk.

13. Case Law 8 — Cour de cassation, 12 December 2013

Cour de cassation, 2e chambre civile, 12 December 2013, No. 12-29.360

This case concerned alleged false medical information in connection with an insurance contract.

The insurer sought to invalidate the insurance based on an alleged intentional misrepresentation.

The Cour de cassation emphasised the requirement to establish:

bad faith;

intentional misrepresentation; and

the required effect on the insured risk.

(Cour de Cassation)

Principle

The mere fact that an applicant gave an incorrect answer does not necessarily establish fraudulent intent.

14. Case Law 9 — Cour de cassation, 15 September 2022

Cour de cassation, 2e chambre civile, 15 September 2022, No. 21-12.278, ECLI:FR:CCASS:2022:C200995

This decision is especially useful for understanding contractual forfeiture clauses.

The court held that an insurer could not rely upon a forfeiture clause merely by invoking general principles of fraud where the insurer had failed to establish that the insured knew of and had accepted the contractual clause in accordance with the applicable insurance-law requirements.

(Cour de Cassation)

Principle

Fraud does not automatically cure defects in contractual incorporation or opposability of an insurance clause.

This is an important protection for policyholders.

15. Fraudulent Claims vs Innocent Mistakes

Courts should distinguish:

This distinction is central to civil-law insurance litigation.

16. Pre-Contractual Bad Faith

Bad faith may arise before the insurance contract is concluded.

For example, an applicant may deliberately conceal:

previous accidents;

previous insurance claims;

known property defects;

relevant business activities;

material health information where lawfully requested;

prior losses.

The consequences may include:

avoidance/nullity;

reduction of indemnity;

alteration of premiums;

refusal of coverage;

depending upon the applicable national legislation.

French law provides a particularly structured distinction between intentional and non-intentional misrepresentation.

17. Post-Loss Bad Faith

The second major category occurs after the insured event.

Example:

A genuine fire causes €100,000 damage.

The insured submits:

genuine loss: €100,000
fraudulent claim: €180,000

The insurer may attempt to rely upon a forfeiture clause.

The important questions are:

Was the statement false?

Was it material?

Was it deliberately false?

Did the policy contain an applicable forfeiture clause?

Was the clause properly incorporated?

Does national law permit the contractual sanction?

What is the effect of the clause?

The French cases above illustrate these questions particularly clearly. (Cour de Cassation)

18. Bad Faith by the Insurer

The phrase “bad faith insurance claim” can also refer to misconduct by an insurer.

Possible examples include:

A. Unreasonable refusal

The insurer refuses a claim despite clear coverage.

B. Strategic delay

The insurer deliberately delays payment without legitimate justification.

C. Misrepresentation of policy terms

The insurer inaccurately tells the insured that a policy exclusion applies.

D. Destruction or suppression of evidence

An insurer deliberately conceals relevant information.

E. Unfair claims investigation

The insurer conducts an investigation designed to manufacture a reason for denial rather than determine the genuine facts.

However, these allegations require careful jurisdiction-specific analysis. European civil-law systems do not all recognise an independent American-style tort of “bad faith insurance.”

19. Good Faith and the Insurer's Claims Handling

The insurer generally has contractual obligations after notification of a loss.

Depending on national law and the contract, these can involve:

investigating the claim;

assessing coverage;

obtaining expert evidence;

calculating the loss;

communicating with the insured;

making payment when liability is established.

An insurer's delay is not automatically bad faith.

The legal question is normally whether the conduct violated:

the insurance contract;

statutory claims-handling obligations;

good-faith requirements;

consumer-protection rules; or

other applicable civil-law duties.

20. Fraud and Forfeiture Clauses

Insurance policies frequently contain provisions stating that an insured loses coverage if the insured:

makes fraudulent statements;

exaggerates the loss;

submits false documents;

conceals relevant information.

Such clauses are sometimes called:

forfeiture clauses;

fraud clauses;

claims cooperation clauses;

dishonest-claim provisions.

Their validity and effect vary by jurisdiction.

Important rule

A court should examine the actual wording of the policy rather than simply applying a general concept of fraud.

The French 2022 decision demonstrates that contractual incorporation and opposability matter. (Cour de Cassation)

21. Proportionality

A major issue is whether a fraudulent part of a claim invalidates the entire claim.

Possible approaches include:

Approach 1 — Entire claim forfeited

If the insured deliberately commits fraud, the entire claim may be lost where the applicable policy and national law provide for that consequence.

Approach 2 — Only fraudulent part excluded

Some legal systems distinguish the fraudulent component from the genuine component.

Approach 3 — Contractual approach

The precise policy wording controls, subject to mandatory insurance law.

The French Cour de cassation's February 2026 decision is significant because it rejected the proposition that forfeiture automatically becomes disproportionate merely because it affects the whole contractual coverage where the applicable clause and bad faith have been established. (Cour de Cassation)

22. Evidence in Bad Faith Insurance Litigation

Evidence is usually decisive.

Important evidence includes:

insurance proposal;

policy wording;

claim forms;

photographs;

invoices;

repair estimates;

expert reports;

bank records;

purchase receipts;

police reports;

medical records where legally permissible;

correspondence;

emails;

telephone records;

digital metadata;

surveillance footage.

The court may reconstruct the chronology:

policy obtained → insured event → claim submitted → investigation → disputed statement → payment/refusal.

23. Causation and Materiality

Not every lie is equally important.

A court may ask:

Did the false information materially affect the insurance contract or the amount claimed?

For example:

A person accidentally writes:

“The television was purchased in 2021”

when it was actually purchased in 2020.

That is very different from:

“The television was destroyed in the fire”

when it had actually been removed from the house months earlier.

The second statement directly concerns the existence of the loss.

The French case law concerning pre-contractual misrepresentation similarly emphasises the importance of whether the false information could change the insurer's assessment of the risk. (Cour de Cassation)

24. Consumer Protection Dimension

Insurance contracts frequently involve consumers.

Therefore, national and EU consumer-protection principles can influence:

transparency;

unfair contractual terms;

information duties;

interpretation of exclusions;

complaint mechanisms;

dispute resolution.

An insurer cannot necessarily rely upon an obscure or improperly incorporated clause simply because it appears somewhere in contractual documentation.

25. Relationship Between Fraud and Insurance Coverage

A useful analytical distinction is:

Question 1 — Was the insured event covered?

Example:

Was the fire an insured risk?

Question 2 — Did the insured commit fraud?

Example:

Did the insured deliberately exaggerate the damage?

Question 3 — What does the policy provide?

Example:

Does the policy impose forfeiture for fraudulent claims?

Question 4 — Is the clause legally enforceable?

Question 5 — Has the insurer proved the necessary elements?

This prevents the court from jumping directly from:

“There is an inaccurate statement”

to:

“All insurance coverage is lost.”

26. Comparative European Perspective

France

French law strongly emphasises:

contractual good faith;

statutory insurance rules;

proof of bad faith;

contractual forfeiture clauses;

materiality of misrepresentation.

The French cases cited above provide particularly clear authority. (Cour de Cassation)

Germany

German insurance disputes operate within the framework of the Bürgerliches Gesetzbuch (BGB) and Versicherungsvertragsgesetz (VVG).

Good faith under §242 BGB and statutory insurance obligations under the VVG can be relevant.

Italy

Italian insurance law distinguishes contractual duties, fraudulent conduct and claims arising under the Civil Code and Insurance Code.

Spain

Spanish insurance contracts are governed principally by the Ley de Contrato de Seguro, which contains specific rules concerning declarations of risk, claims and intentional conduct.

England and Wales

English insurance law historically developed a strong doctrine of utmost good faith, although the Insurance Act 2015 substantially restructured remedies for consumer and non-consumer insurance misrepresentation.

The treatment of fraudulent claims is therefore distinct from the French civil-law approach.

27. Key Differences Between Bad Faith and Fraud

28. Remedies

Depending on the jurisdiction and facts, remedies can include:

Against the insured

rejection of the claim;

forfeiture of insurance benefits;

avoidance of the policy;

recovery of amounts already paid;

damages;

potentially criminal consequences for serious fraud.

Against the insurer

payment of the insured loss;

interest;

damages for contractual breach;

costs;

other statutory remedies.

The availability and scope of each remedy depend heavily upon national law.

29. Important Case-Law Table

These authorities are especially useful for studying the French civil-law treatment of bad-faith insurance claims. They should not be presented as though they establish one uniform rule for every European jurisdiction. (Cour de Cassation)

30. Practical Legal Test

A useful European civil-law analysis can follow this sequence:

1. Identify the insurance contract
↓
2. Identify the insured event
↓
3. Identify the disputed statement/conduct
↓
4. Determine whether it was false or misleading
↓
5. Determine whether it was intentional/bad faith
↓
6. Determine materiality
↓
7. Examine the policy clause
↓
8. Check statutory requirements for the clause
↓
9. Determine who bears the burden of proof
↓
10. Determine the contractual/statutory consequence
↓
11. Calculate recoverable loss or forfeiture
↓
12. Consider interest, damages and procedural costs.

31. Conclusion

Bad faith insurance claims in Europe involve the interaction of contractual good faith, insurance legislation, fraud principles, evidence and remedies. The central distinction is between an innocent or negligent error and a deliberately dishonest statement or claim.

The French jurisprudence provides a particularly clear illustration. The insurer generally cannot establish forfeiture merely by showing that information was inaccurate; where the relevant law requires bad faith, that element must be proved. At the same time, once deliberate bad-faith false statements are established and a valid, properly incorporated forfeiture clause applies, courts may enforce substantial contractual consequences. (Cour de Cassation)

Exam formula

Insurance contract → good faith → truthful disclosure → genuine claim → proof of fraud/bad faith → policy clause → materiality → burden of proof → forfeiture/avoidance/payment → damages and remedies.