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What general rules, requirements and procedures govern the filing of insurance claims?
The party claiming to have an insurance claim must file the claim with the insurer before the expiry of the period of limitation.
In some sectors, the rules stipulate that an insurance claim must be filed in writing; however, it is common in Denmark for insurance claims to be filed orally.
It is sufficient in respect of certain types of business insurance that a party entitled to damages has filed its claim for damages with the policy holder in time (the business covered by insurance).
What is the time bar for filing claims?
The rules on the time bar for filing insurance claims are laid out in the Insurance Contracts Act and the Danish Limitation Act. The rules are complicated and the periods of limitation are calculated differently depending on the type of claim. However, the general rule is that an insurance claim must be filed within three years before it becomes time barred. If the claim has been filed on time, a new period of limitation starts to run under Section 29 of the Insurance Contracts Act, which ensures that an insurance claim cannot become time barred while the insurer assesses the claim.
The general rule is that a new period of limitation of one year applies if the company rejects the claim and a new period of limitation of three years applies if the company accepts the claim.
Denial of claim
On what grounds can the (re)insurer deny coverage?
A policy holder must submit the relevant information to clarify the claim and if the holder fails to do so, the insurer may refuse to take a position on the insurance claim.
An insurer may also reject cover to a policy holder or a third party entitled to damages if the claim for damages or the insurance event has not been proved.
An insurance claim can be rejected if it is clear that the claim is not covered by or is exempt from the insurance cover.
An insurer may also refuse cover if the insurance contract was entered into based on incorrect information given by the policy holder (in bad faith).
What rules and procedures govern the insured’s challenge of the denial of a claim?
The Insurance Contracts Act regulates the insurance contract and rules on good insurance practice also apply.
In general, a policy holder is entitled to ask for the reasons that cover was rejected to be in writing. The insurer must have a complaints officer. The policy holder may file a complaint if it disagrees with the insurer's decision. The complaints officer must be independent of the claims handling.
If the policy holder still disagrees, private policy holders may file a complaint with the Insurance Complaints Board. Both the policy holder and the insurer are bound by the decisions made by the Insurance Complaints Board. However, the board’s decision may be brought before the courts.
In case of business insurance, it is possible to file a complaint with the Danish trade organisation Forsikring & Pension. The trade organisation may give its opinion on the complaint, but the insurer is not bound by the opinion.
Any disagreements about business insurance may be brought before the courts or the parties can agree through arbitration.
On what grounds can a third party file a claim directly with the (re)insurer?
An injured third party is free to file a claim directly with the insurer if the claim is filed under liability insurance. The insurer is directly liable to an injured third party in special situations (eg, bodily injury caused by a motor vehicle if the insurance has been taken out with the insurer).
Section 95 of the Insurance Contracts Act stipulates that when the insured's liability for damages to the injured party has been established and the damages amount assessed, the injured party must be subrogated to the insured's rights against the insurer, but only to the extent that the party entitled to damages has not already received satisfaction for its claim in whole or in part.
The policy holder is not a party a reinsurance agreement and cannot file a claim with the reinsurer. As a contractual party, the insurer may file a claim with the reinsurer.
Are punitive damages insurable?
Yes, to a limited extent it is possible to insure against certain punitive damages. However, the cover depends on the type of violation and the extent of the cover depends on a specific assessment of the individual insurance relationship.
As a general rule, it is not possible to insure against damage caused by a party's own criminal actions. It is possible to take out criminal insurance in Denmark; however, this covers loss that a business should suffer only as a result of an employee's criminal actions.
What regime governs (re)insurers’ subrogation rights?
As a general rule, if an insurer has paid damages to an injured party, the insurer is subrogated to the injured party's claim. However, the Danish Consolidation Act on the Liability to Pay Compensation contains important exemptions in this regard.
The Consolidation Act on the Liability to Pay Compensation limits an insurer's right to recourse in many situations where insurance cover has been taken out. The rules can be found in Part 2 of the act. Corresponding limitations can be found in other acts.
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