The family key power as a liability trap for the insurance broker

In its ruling of 28 February 2018, the Federal Court of Justice (BGH, Ref. XII ZR 94/17) ruled that “a spouse may terminate the fully comprehensive insurance policy for the family vehicle running on his or her partner even without the latter’s power of attorney”, as the press release did not quite put it:


This is because spouses already possess a statutory power of attorney (in addition to statutory authorisation to co-oblige the spouse), the key power, § 1357 I BGB.


Preprogrammed broker liability?

Brokers already have an obligation to provide assistance in the event of a claim, for example by indicating deadlines for reporting the claim to the insurer (BGH, ruling of 30.11.2017, ref. I ZR 143/16); this applies all the more in the case of a recognisably imminent loss:


A broker could be liable if he arranges insurance cover for a policyholder (UN) whose spouse later effectively terminates the cover without consultation, in the course of a business of daily life:

This would not only require clarification, but the broker would probably also have to show ways to avoid this, for example by means of an individual agreement to waive § 1357 BGB.

This applies not only to new business but also to its current portfolio.


Insurance cover through the broker’s professional liability insurance?

Spouses can obtain free insurance cover in this way from “simpler” brokers by taking out a policy with one of them and then terminating it with the other, or via the latter’s professional liability insurance (VSH).

At the latest when the broker receives a termination notice or warning from the insurer (VR), he should investigate. A spouse does not have to appear expressly “in the name of another” (of the spouse) for the co-obligation of the other spouse, but also for the insurance termination.


damage to the spouse before divorce or separation

The key power is limited to the time before the separation of the spouses.

For example, it’s nice when the destitute spouse cancels the supplementary hospital insurance taken out for him by the other person as UN and then goes to a hospital double room with the head physician, as a business of daily life.


The BGH (ruling of 27 November 1991, file no. XII ZR 226/90) already decided that the medically indicated treatment of one spouse which cannot be postponed leads to the joint liability of the other spouse in an unlimited amount because it is part of the adequate coverage of the family’s living requirements. This “special need” is limited by the capacity of the spouse as maintenance debtor, §§ 1360, 1360a BGB. These are then circumstances after the life course, which can exclude the co-obligation, § 1357 I 2 BGB.


Spouses may exclude their own joint obligation or joint liability

Anyone who does not immediately exclude his own joint liability when concluding the contract and clearly discloses this, is jointly liable (BGH, judgement of 13.02.1985, ref. IVb ZR 72/83). It would be unsuitable to try to make an affidavit as an (alleged) private patient right after the beginning of an extensive dental rehabilitation, because the spouse is jointly liable (AG Viersen, judgement of 14.08.2003, Az. 33 C 39/03). Both spouses are joint and several debtors (OLG Cologne, Az. 27 U 106/92, judgement of 03.11.1993), even if the jointly liable spouse only learns of the concrete transaction at a later date – for example through a claim for payment by a clinic.


The fully insured person can also cancel the dental protection completely, as well as the supplementary insurance. Even in the case of complete non-insurance, the spouse is jointly liable in the event of hospital treatment (LG München, judgement of 12.07.2000, Az. 9 O 9272/00).


The content of the co-obligation depends on the consumption style of the necessities of life

Depending on the usual consumption habits in accordance with the “social situation” (BGH, loc. cit.), other everyday objects fall under § 1357 BGB in addition to insurance policies: Food, necessary clothing, household appliances and other household effects, telephone and internet, energy supply, craftsmen in the married apartment, domestic help, involvement of a tax advisor for the spouses. But not the purchase of a (scrap) property.


Elimination of the power of the keys

Spouses can exclude key power, including a kind of negative publicity by entry in the register of property, §§ 1357 II 2, 1412 BGB. In the case of purchases, both spouses do not automatically become owners – so that this too can be regulated by the spouses.


Otherwise, the movable property of both spouses is liable to the creditor in the case of debts of only one spouse, § 1362 BGB. This, like the key power, cannot be changed simply by a private contract in order to protect legal relations.

However, one spouse can unilaterally limit or even exclude the other spouse’s key power – and later (upon application) have this confirmed or revoked by the guardianship court, § 266 II FamFG.

Such unilateral and private written declarations have no effect on creditors.


Approach to insurance distribution – spouse liability for everyday business

However, this could also promote sales: If the spouse learns that he or she could be held liable for the other’s medical treatment and dental prostheses without prior knowledge, he or she may want to take out insurance after all. Often it would be sufficient to co-insure the spouse as an insured person (VP). However, even this is not without risk – therefore, two separate contracts with different insurers could be safer with the same policyholder.


Termination of insurance due to insurance fraud of the co-insured person

The co-insured wife had submitted a dental rehabilitation for EUR 12,000 via the UN to the insurer (VR), which reimbursed her for the most part. The dentist had to repay her fee due to a lawsuit against her, of which the UN and VR only learned later. The latter considered this to be an insurance fraud and demanded his benefits back with notice, pointing out that a termination of the entire contract without notice is also possible for the husband. The conduct of the wife as an authorised representative – or in this case as a co-insured person – is to be attributed to the UN (Federal Court of Justice ruling of 7 December 2011 – Ref.: IV ZR 50/11).


by Dr. Johannes Fiala and Dipl.-Math. Peter A. Schramm


by courtesy of (published on 11.02.2019)



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Dr. Johannes Fiala Dr. Johannes Fiala

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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