Insurance debt collection

Insurance debt collection is the legal and industry term for debt collection carried out for, or by, an insurance company. In other words, insurance debt collection refers to debt collection cases related to non-payment to an insurance company.

What types of cases does insurance debt collection cover?

The term insurance debt collection basically covers all non-payments to insurance companies - in practice, this often refers to non-payment of premiums for travel insurance, fire insurance, liability and comprehensive insurance, for example.

Thus, debt collection cases in an insurance company do not differ significantly from other types of debt collection cases. However, the complexity and associated law can be different, especially insurance contract law.

What are the similarities between insurance debt collection and classic debt collection?

Basically, debt collection for an insurance company is treated in almost the same way as if the claim had been made to a more classic trader.

Often, prior to the actual debt collection process, a number of reminders will be sent, with or without a reminder fee. 

After the reminder process, a debt collection notice will be sent and the debtor will be notified of a possible debt collection process if the claim is not paid.

If the claim is still not paid after the debt collection notice has been sent and the deadline of at least 10 days has passed, the case will go to debt collection.

In the debt collection process, it is possible to impose a collection fee, call the debtor, appear in person, register in the debt register - and possibly submit a case to the bailiff court for the purpose of legal debt collection.

The bailiff court has the option to attach the debtor's assets or declare the debtor bankrupt, in cooperation with the creditor / insurance company.

Where insurance debt collection differs from regular debt collection cases is that insurance debt collection can often involve more complexity and more legal proceedings - such as insurance contract law issues.

At Collectia, we have a dedicated team that handles debt collection cases for insurance companies in Denmark and the rest of the Nordic region. The team knows the challenges and relevant law associated with the collection of non-payment to insurance companies. 

What do you need to pay special attention to when collecting insurance?

Although debt collection for an insurance company is in many ways similar to debt collection for any other business, there are a number of issues to be aware of when handling debt collection on behalf of an insurance company.

On the one hand, there is the associated law in the Insurance Contract Act that must be respected, and on the other hand, there are a number of customer relationship issues that must be observed.

While many traditional businesses have debt collection cases related to the sale of a single product, service or service - insurance companies live on long-term customer relationships. This must be respected when a debt collection company helps an insurance company. 

Who needs to handle insurance debt collection?

In Denmark, there are basically only two entities that are allowed to handle debt collection for others, so-called third-party debt collection; debt collection companies and lawyers.

In addition to debt collection companies and lawyers, the creditor must of course always handle all or part of the debt collection process themselves - in the case of insurance debt collection, the insurance company.

Insurance debt collection can also be shared between the insurance company itself - and a debt collection agency. In that case, the insurance company will handle the collection actions, such as the reminder process, while the case is handed over to a debt collection agency.

In Denmark, there are over 140 authorized debt collection companies that can and may handle debt collection, and thus insurance debt collection, on behalf of others.

Likewise, all lawyers in Denmark are allowed to handle debt collection on behalf of their clients, however, not all lawyers want, can or will help with debt collection - and thus choose to offer debt collection as a service.

In Denmark, there are 4,635 lawyers (2024 figures) - and 63 lawyers and law firms that have informed Advokatnøglen that they offer debt collection.

Section 14 of the Insurance Contracts Act

Did you know that in Denmark it is mandatory to have liability insurance for your vehicle, car or motorcycle? 

This also means that if your insurance has been terminated due to non-payment, this will trigger a daily fee of 250 DKK (2024 figures).

If you as a customer of an insurance company have not paid your insurance premium for your motor vehicle liability insurance, the insurance company can terminate the insurance contract if the premium is not paid within 21 days of the termination.