Insurer must prove bad faith to avoid paying compensation, judge says

▤ Summary

A Brazilian judge ruled that an insurer must prove clear bad faith before denying an auto theft claim in a digital insurance contract. The case involved Caixa Seguradora and Youse Seguro, which rejected coverage and canceled the policy after the customer reported the theft. The court found the company’s evidence showed only inconsistencies and indirect signs, not enough to prove fraud. The ruling reinforces that insurers operating online carry the risk of relying on customer declarations and may need stronger underwriting checks or more detailed risk questionnaires.

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