The bank card expired, the old account was closed, the direct debit failed to go through for some reason – and months later, when a pipe bursts, it turns out that the home insurance is no longer in force. As a broker, I see that one of the most common and most painful answers to the question ‘why didn't the insurer pay?’ is not an exclusion but unpaid premium: the contract has quietly terminated, with retroactive effect. The rules are laid down precisely in the Hungarian Civil Code (Ptk.), and at every step of the process there is something you can do to save the cover. This article goes through it, from the reminder to reinstatement.
- Home insurance does not end on the day the premium is missed: under Section 6:449 of the Hungarian Civil Code (Ptk.), the insurer calls on you in writing to pay, warning of the consequences and setting a 30-day grace period from the date the reminder is sent – and as long as it sends no reminder, it remains on risk until the end of the current insurance period.
- If the grace period expires without payment, the contract terminates retroactively as of the due date: a loss occurring in the interim is therefore typically not covered, and a premium paid later does not revive the contract either.
- Within 120 days of termination, you can request in writing that cover be reinstated, provided the missed premium is paid – the insurer may reinstate the cover but is not obliged to.
Step one: the reminder and the 30-day grace period
Under Section 6:449 (1) of the Ptk., if the premium due is not paid, the insurer – warning of the consequences – calls on the policyholder in writing to pay, setting an additional deadline (póthatáridő) of thirty days from the date the reminder is sent. In everyday language this is known as the ‘grace period’, but it is worth understanding it precisely: the thirty days run from the date the reminder is sent, not from the due date and not from the date you receive the letter; in its own policy conditions the insurer may set a longer grace period, but not a shorter one. The Home Insurance Guide of MABISZ (the Hungarian insurers' association) also records an important consequence: ‘If the insurer does not send a written reminder, it remains on risk within the current insurance period, until the end of that period.’ So a missing reminder is not your risk – the arrival of a reminder, however, signals the most important deadline you need to know about in home insurance.
The practical lesson is simple: never treat a reminder as junk mail. If one arrives – by post or on the insurer's customer portal – pay the premium within the grace period and keep the proof of payment. If the reminder did not reach you because you had moved in the meantime, that is a failure to meet your own obligation to report changes; this is why the article on reporting changes puts the correspondence address first.
If the grace period expires without payment: retroactive termination
Under the Ptk., if the grace period expires without payment, the contract terminates with retroactive effect to the due date, unless the insurer enforces its premium claim through the courts without delay. Retroactivity is the key: the contract terminates not on the last day of the grace period but on the date on which the unpaid premium fell due. This means that a loss occurring between the due date and the end of the grace period – when everyone still believed the contract was in force – is typically not covered, because the contract was subsequently terminated as of the day on which the premium was due. The MABISZ guide also stresses that ‘premium paid after termination for non-payment does not put the contract back into force’; the insurer refunds it. So when it comes to a claim, the argument ‘but I paid afterwards’ does not work.
Two further consequences come with this. If the contract carried a long-term discount (loyalty period), then according to the MABISZ guide the insurer can also claim payment of the discount granted when the contract ends through non-payment. And if there is a mortgage on the property, the insurer typically notifies the bank of the termination because of the mortgagee clause, and under the loan agreement the bank may require insurance that is in force – the article on home insurance alongside a home loan describes the consequences of this. Among the common reasons for claim rejection, unpaid premium is particularly unpleasant because the loss really would be an insured event – there is simply no longer anyone to report it to.
The 120-day reinstatement: what it means and what it does not
Section 6:449 (2) of the Ptk. offers a second chance: if the contract terminated because a subsequent premium was not paid, the policyholder may, within one hundred and twenty days of the date of termination, ask the insurer in writing to reinstate cover, and the insurer may reinstate the cover on the terms of the terminated contract, provided that the premium that had previously fallen due is paid. In practice this is called reactivation. It has three limits that are worth seeing clearly. The first: the request is your task, in writing and within the deadline – the insurer is not obliged to offer it. The second: the rule applies to subsequent premiums; if the first premium is missed, the contract terminates in the same way, but the Ptk. does not provide for reinstatement in that case – a new proposal is then needed; the start of cover is discussed in the article on when cover starts. The third, in the words of the MABISZ guide: ‘the insurer is not obliged to reactivate the contract; this depends on the insurer's individual decision’ – the Ptk. uses the word ‘may reinstate’, not ‘is obliged to’.
What reactivation typically does not solve: a loss occurring between termination and reinstatement. Hungarian policy conditions typically restart cover from the acceptance of the reinstatement request or from receipt of the missed premium, and do not pay for losses in the interim period – if your own policy conditions differ from this, that is the exception. So the 120 days are not a ‘grace period’ during which you can wait at leisure, but the last chance to avoid having to take out a new contract with a fresh risk assessment, possibly a waiting period, and disclosure of your claims history all over again.
If reinstatement is not possible: a new contract
If the 120 days have passed, or the insurer does not reinstate the cover, the solution is a new contract – with the same insurer or a different one. Two things need to be taken into account here. On the proposal form, the insurer may ask, as part of your duty of disclosure, why the previous contract ended; you must answer this honestly, because a material circumstance that is withheld may later lead to the insurer being released from paying. The other is that cover under the new contract is not retroactive: the interim period remains without cover, and a waiting period may apply to certain events. This is the situation in which keeping your premium payments in order would have been simpler and less costly than any later solution.
What should you do now?
Check how you pay the premium and whether the direct debit, bank card or transfer is linked to your current account; after a card replacement, a change of account, a divorce or a move, this is the first thing to do. Register on the insurer's customer portal, where the payment status of the premium and any reminders are typically visible. If you have received a reminder, pay within the grace period; if it has already expired, work out the date of termination and, within 120 days, request reinstatement in writing, paying the missed premium. Paying the premium and making the request are your own non-transferable obligations; if you let me know, I help where I can with putting the request together and interpreting the policy conditions.
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Sources
- Hungarian Civil Code (Ptk.) Section 6:449 – Consequences of failure to pay the premium (Act V of 2013)
- MABISZ (Hungarian insurers' association) Home Insurance Guide (20 February 2025) – Chapters 7–8: non-payment of premium, reactivation
- Generali general property insurance conditions – failure to pay the premium, reinstatement within 120 days
- MNB (Hungarian central bank / supervisor) Pénzügyi Navigátor (Financial Navigator) – consumer protection information
