Portugal Insurers Reject Automatic Grace Periods—Defer Your Premium in Writing

Portugal’s main insurance lobby has warned it will only countenance premium deferrals that fit squarely inside existing law and the Constitution, effectively closing the door on blanket grace periods some consumer groups had been demanding.

Why This Matters

• No automatic grace period – You still risk losing cover if the premium is not paid on time.

• Room for negotiation – Article 41 of the insurance statute lets you write in a later payment date, but it has to be in the contract.

• COVID-style relief unlikely to return – Temporary rules used in 2020 are considered exceptional and are not part of the 2026 playbook.

• Consumer leverage – A written amendment is enough to secure a delay, so push your insurer for it before missing a due date.

The Position Taken by Insurers

The Portugal Association of Insurers (APS) told lawmakers that any call for premium holidays must respect the Decreto-Lei 72/2008, the country’s insurance code, and broader constitutional principles such as legal certainty and equal treatment. The group argues that forcing companies to grant sweeping extensions would undermine actuarial calculations and, by extension, the sector’s solvency ratio—currently hovering at 190 %, one of the highest in the euro area.

What the Law Already Allows

Under Article 41 of the insurance code, a standard one-year policy renews automatically unless either side objects. Crucially, the same article says the parties may “agree otherwise.” That catch-all clause has been used to:

• schedule the first payment after coverage begins,

• suspend premium collection during seasonal business shutdowns, and

• apply a temporary discount when the insured risk drops, for example when a fleet of cars sits idle.Every deviation must be written down and handed to the policyholder. Verbal promises are worthless if you end up in court.

Constitutional Guardrails

Although the Constitution does not mention insurance directly, its principles shape every contract:

• Consumer protection (Article 60) – the State must guard policyholders from abusive clauses.

• Freedom of contract – parties may negotiate terms, but the State can step in to correct power imbalances.

• Legal certainty and trust – sudden retroactive changes are likely to be struck down by the Portugal Constitutional Court.Past rulings on energy taxes and banking fees suggest judges look for proportionality: the measure must solve a real problem without crushing legitimate business expectations.

Data: What We Know and Don’t Know

The Insurance & Pension Supervisory Authority (ASF) publishes volumes of premium income—€13.3 B in 2024 and a provisional €16.1 B in 2025—but offers no public tally of deferral requests. Industry insiders admit the spike seen in 2020, when premiums worth roughly €480 M were rescheduled, has now normalized. Complaints to ASF fell 6.5 % last year, hinting that ad-hoc negotiations are working quietly behind the scenes.

What This Means for Residents

Pay on time or renegotiate early. The default rule is still “no premium, no cover.”

Get it in writing. A simple email confirming a new due date meets the legal standard, but a formal endorsement is safer.

Leverage risk reduction. If your business activity has dropped or your car fleet is parked, you can cite Article 98 of the code to request a proportional premium cut.

Expect targeted, not blanket, relief. Future crises may trigger sector-specific decrees, but one-size-fits-all pauses like those of 2020 are improbable.

Outlook for 2026 and Beyond

The Finance Ministry is reviewing EU directives on sustainability disclosures and digital insurance contracts. Neither draft touches premium timing, yet lobbyists fear that mandated climate-risk buffers could make insurers less willing to grant payment flexibility. Meanwhile, consumer advocates plan to ask Parliament for a 30-day statutory grace period. APS counters that the current, contract-by-contract solution already protects households without jeopardizing solvency.

Bottom line: nothing stops you from arranging a payment delay today—except failing to ask before the premium falls due.