Claims

General

What general rules, requirements and procedures govern the filing of insurance claims?

As a general rule, after having become aware of an insured event, the insured must immediately inform the insurer. The insurer may then require information that it deems necessary to assess the insured event or to what extent the insurer must provide coverage. However, these procedures are not mandatory and the insurer and the insured may provide for different regulations in the insurance contract. No formal requirements apply to notification. Insurance contracts often provide that the notification must be in ‘written’ form (eg, an email or a fax). The notification must state that the insured event has occurred and include the claim for coverage.

There are no specific statutory rules for filing reinsurance claims.

Time bar

What is the time bar for filing claims?

The limitation period for filing claims is three years. If a third party has a claim under an insurance contract, the limitation period starts as soon as the third party becomes aware of its right to make a claim. A long-stop limitation period of 10 years applies even if the third party has not been aware of its right to claim.

Where the insured has made a claim to the insurer, the limitation period will be stayed until the insurer has issued a decision in written form setting out, at a minimum, the facts on which the denial of the claim is based and the relevant statutory or contractual provision. This notification to the insured is without prejudice to the insurer. The insurer may at a later stage, for example in subsequent legal proceedings, provide further reasons and facts for the denial. In any event, a long-stop limitation of 10 years applies.

The insurer may, under certain conditions, shorten the limitation period. To this end, the insurer must reject the insured's alleged claim in the manner described above and at the same time inform the insured that the insurer is released from the obligation to pay benefits if the insured does not assert the claim in court within one year. If the policyholder does not do so within one year, the claim against the insurer expires. Given that this is a significant outcome for the insured, Austrian courts take a strict approach as to whether the requirements for the claim to have expired are met.  

Denial of claim

On what grounds can the (re)insurer deny coverage?

The validity of denial of coverage is always subject to a case-by-case analysis. In general, a (re)insurer may validly deny coverage on the grounds that the event for which a claim is filed is not covered or that the insured event has occured outside of the insured time period. Under certain circumstances, the insurer may also argue that the insured has violated a contractual obligation which the parties have agreed would lead to the release of the (re)insurer from its obligations. With respect to insurers (and not reinsurers), the Insurance Contract Act provides for certain grounds under which, in certain circumstances, an insurer may deny coverage, including:

  • default on or late payment of a premium;
  • the insured increasing the risk covered without notifying the insurer; or
  • the insured instigating an insured event in an intentional or grossly negligent manner or violating its obligation to mitigate damage.

What rules and procedures govern the insured’s challenge of the denial of a claim?

There are no specific rules governing an insured's challenge of the denial of a claim. Where a claim is denied, the policyholder may file a claim against insured.

Third-party actions

On what grounds can a third party file a claim directly with the (re)insurer?

There are no specific rules governing an insured's challenge of the denial of a claim. Where a claim is denied, the policyholder may file a claim against insured.

Punitive damages

Are punitive damages insurable?

Austrian law does not recognise the concept of punitive damages or define an ‘uninsurable interest’. As a basic rule, any insurance contract providing for coverage which is deemed to be contrary to good morals or would cover administrative or penal fines is void.

Subrogation

What regime governs (re)insurers’ subrogation rights?

Where an insured has a damage claim against the injuring party, this claim is, by law, automatically transferred to the insurer if the insurer has covered the insured’s loss. However, if the injuring party is a family member and lives in the same household as the insured party, the claim will not be transferred unless such family member has caused the damage intentionally.

This rule does not apply to reinsurers, as the Insurance Contract Act is not applicable to them.