Damage Event Covered by Insurance

The basic prerequisite for a claim for insurance payouts is the occurrence of an insured event, i.e., damage or injury to the insured property or injury to the insured person’s health, in a manner stipulated by the insurance contract. The most common insurance events are traffic accidents, where the participants are obligatorily covered by liability insurance, leading to both property damage and personal injury or death. Other common disputes involve property insurance, particularly in connection with natural disasters such as heavy rainfall, floods, landslides, or fires.

Claims Processing

The process of handling insurance claims is generally similar for all types of insurance:

1. Reporting the Insurance Event

If you suffer damage or injury covered by insurance, you are typically required to report the event to the insurer without unnecessary delay (the exact time frame is usually specified in the insurance conditions) and follow the insurer's instructions for handling the claim. The insured party is obligated to provide evidence of the damage and, if necessary, allow the insurer to inspect the damaged property or verify the circumstances of the event. At this stage, it is advisable to consider representation by an insurance broker or even a lawyer.

2. Claims Handling

During the claims handling process, the insurer investigates the circumstances of the reported event, determines whether it is covered by the insurance, and assesses the extent of the damage that needs to be compensated. Insurers usually have a dedicated claims department, although sometimes external specialized companies are tasked with claims processing.

3. Conclusion of Claims Investigation

The insurer concludes the claims handling process by determining the compensable amount of damage or injury. If the insured disagrees with the insurer's assessment, they can file a complaint. At this stage, another department of the insurer may review the claim, potentially increasing the payout or rejecting the complaint. Often, insurance claims are successfully resolved with the help of a lawyer at this pre-litigation stage. If legal representation is already necessary at this stage and the lawyer is successful, they are also entitled to a flat fee to cover legal costs, just as if the case had gone to court.

Lawsuit for Insurance Payout

If efforts to resolve the claim with the insurer fail, or are only partially successful, the insured may have no other option but to pursue the claim through the courts. At this point, legal representation by a lawyer is typically indispensable. The central issue in such a dispute is whether an insured event occurred, i.e., damage or injury to the insured property or person’s health, and whether it happened in a manner covered by the insurance contract. Disputes often arise over whether the damage event is included among the insured risks.

In some cases, the issue may be a purely legal interpretation of the insurance terms, but it can also involve expert assessment, such as determining whether the physical cause of the damage meets the definition outlined in the insurance conditions. Experts also frequently assess the credibility or likelihood of the accident event in cases where the insurer disputes the extent of the damage caused by the insured event.

Another common point of contention is the amount of damage or non-pecuniary injury caused. Experts often play a major role in these cases, whether assessing the cost of repairs, vehicle rentals, or determining the depreciation in the market value of a vehicle due to the insured event. Disputes also often center on the interpretation of the insurance terms (i.e., whether and to what extent the damage is covered by the insurance). It is not uncommon for insurance terms to be ambiguous. If the terms allow for multiple interpretations, the insurer’s terms should be interpreted in the way most favorable to the insured, as is generally the case with contracts concluded with consumers.

A dispute over an insurance payout can be legally and factually complex. However, an experienced lawyer is able to assess the claim and the chances of success in a pragmatic way and recommend an appropriate course of action so that the insured can effectively assert their claims while minimizing the risk of failure.

Good News

The good news is that insurers usually do not engage in disputes "as a rule," but only out of necessity, as they are obliged to act as prudent managers. They are often reluctant to admit insurance claims that they do not consider to be clear-cut. However, once a first-instance court decision is made, or a specific issue is clarified before the court, the insurer is more likely to settle the dispute amicably.

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