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What general rules, requirements and procedures govern the filing of insurance claims?
No general rules, requirements or procedures govern the filing of insurance claims with respect to reinsurance undertakings, as they are purely contract based and do not fall within the ambit of the Insurance Contract Act.
Regarding insurance contracts, the insured must notify the insurer of an insured event immediately after becoming aware of it (ie, without undue delay). No formal requirements apply to the notification. Insurance contracts usually provide that the notification must be in ‘written’ form (eg, an email or a fax) and identify the person making the statement (no physical or electronic signature is required).
The notification must state that the insured event has occurred and include the claim for coverage. On receipt of such notice, the insurer may request from the insured any information that it deems necessary to determine the insured event and the scope of its obligation to perform.
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 its insurer, the limitation period will be stayed until the insurer has issued a decision in writing setting out, at a minimum, the facts on which the denial of the claim is based and the relevant statutory or contractual provision. In any event, a long-stop limitation of 10 years applies. The limitation period will be stayed during settlement discussions and for the period in which the insured is unable, without fault on its part, to enforce its claim under the insurance contract in a timely manner.
Denial of claim
On what grounds can the (re)insurer deny coverage?
In general, a (re)insurer may validly deny coverage on the grounds that the event for which a claim is filed is not covered. Under certain circumstances, it may also argue that the policyholder has violated an obligation under the contract, which – under the contract – would lead to a release of the (re)insurer from its obligations.
With respect to insurers (and not reinsurers), the Insurance Contract Act also provides grounds on which, under certain circumstances, an insurer may deny coverage – for example, in case of:
- default on or late payment of the premium;
- the policyholder increasing the risk without notifying the insurer; or
- the policyholder instigating the insured event in an intentional or grossly negligent manner or violating its obligation to mitigate the damage.
The validity of denial of coverage is always subject to a case-by-case analysis.
What rules and procedures govern the insured’s challenge of the denial of a claim?
Where the claim is denied, the policyholder must bring the denied insurance claim to court within one year after being informed, in writing, of:
- the denial; and
- the facts and relevant statutory or contractual provision on which it was based.
Failure to do so will release the insurer from its obligation to perform under the insurance contract.
On what grounds can a third party file a claim directly with the (re)insurer?
Under the motor car liability insurance regime, the injured person may file a claim directly with the liability insurer. The liable insured and the insurer are then jointly and severally liable to pay damages in accordance with the liability insurance contract.
In case of other (re)insurers, the applicable grounds depend on the wording of the individual (re)insurance contract.
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.
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.
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