for insurance companies in the event of concealment of circumstances relevant to the risk in the insurance application
“In the past, even the future was better.” (Karl Valentin)
An insurance company is sued for payment of damages in the amount of 268,039.38 Euro (household insurance) and 51,150.90 Euro (building insurance). The policyholder had concealed pre-contractual water damage from the insurer. The policyholder’s claim was dismissed at first and second instance, as the insurer was entitled to compensation “due to a breach of the obligation to provide information when applying for insurance”. The Federal Court of Justice (BGH) overturned this decision in its ruling of 7 February 2007 (Case No. IV ZR 5/06). No compensation from BGB besides the regulations in §§ 16 ff. VVG: The BGH based its decision on the fact that an insurance company is regularly not entitled to “damages for breach of pre-contractual duty of disclosure” (CIC) if the policyholder breaches his pre-contractual duty of disclosure. Sanction options of the insurer: The insurer regularly has only the conclusive options of the VVG open to it if a duty of disclosure has been breached, in particular – premium increase – cancellation of the insurance contract – withdrawal from the contract This is settled case law of the BGH. Exception: deception about non-hazardous circumstances – other protected interests. Thus, only in cases outside the scope of application of §§ 16 ff. VVG, for example in the case of intentional immoral damage, or in the case of tortious acts. This is particularly the case if the policyholder would have taken out the insurance “with the preconceived intention” of using the insurance for fraudulent claims and/or intentionally causing future insurance claims. However, it will rarely be possible to prove this in practice.
(Expert Report, 20.04.2007)
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About the author
PhD, MBA, MM
Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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