Before 1 January 2006 contracts of insurance were governed by certain provisions of the Dutch Commercial Code and certain general provisions of the Dutch Civil Code. As per 1 January 2006 Book 7 of the Dutch Civil Code was augmented by a new Title. This is Title 17, which contains new provisions regarding insurance contracts and sets aside the aforementioned former provisions.
The “new insurance law” includes a new provision regarding the time bar of an insurance claim. Since the new insurance law entered into force insured (including beneficiaries) had to be aware of quite a short time bar following a rejection of a claim by the insurer. As of 1 July 2010 the provision concerned, art. 7:942 DCC, has been amended in favor of the insured.
Before 1 July 2010 art. 7:942 DCC provided that the insured had three years to lodge his claim with the insurer through a written notification. These three years started from the moment the insured became aware of the claim. In case of a liability insurance a claim could not become time-barred until six months after a claim was made by a third party against the insured.
The three year time bar could only be stopped by a formal written notification claiming payment. A rejection of the claim by the insurer had to be made unequivocally in writing in which letter the insurer pointed out the new time bar of six months. This letter had to be sent by registered mail. If the insured did not again send a notification claiming payment before the end of these six months the claim became time-barred.
The six months time bar after the rejection of a claim was a particular cause of disputes between the insured and the insurer. For example the case in which the insured sent a formal notification after rejection of a claim: was there a time bar applicable and if so, which one?The three-year one or the six-month one?
The history of the drafting of art. 7:942 DCC suggest that the insured had to send a formal notification every six months after the rejection of the claim. Even in a case in which the insured had not responded to earlier notifications after the first (and only) rejection of a claim. This caused extra work and stress for the insured who had to be aware of the time bar and had to send a notification every six months.
A dispute arose in cases of negotiations between insured and insurer who tried to solve the matter amicably. Negotiations did not stop the time bar. The insured had, therefore, to send a formal notification every six months even if parties were involved in negotiations and were close to a an amicable settlement.
After the four and a half years during which the article had been in force these issues led to the amendment of art. 7:942 DCC. On 1 July 2010 the six months time bar was expunged.
The insured still has three years to lodge his claim with the insurer through a written notification. These three years still start from the moment the insured becomes aware of this claim. In case in which the insurer rejects the claim a new time bar of three years becomes effective. The insured no longer has to be concerned about a six months time bar.
In a case of a liability insurance the insured gains enhanced protection. In such a case the time bar is suspended by every negotiation between the insured (or beneficiary) and the insurer. The three-year time bar only starts (again) one day after the day the insurer unequivocally notifies the insured that he ends the negotiations.
From 1 July 2010 the insured has had more time to pursue his claim and does not have to take separate action to maintain his claim regarding liability insurance during negotiations.