The basic prerequisite is the occurrence of an insured event covered by the insurance. That is, damage to or loss of an insured item, or harm to the health of an insured person – occurring in a manner contemplated by the insurance contract.
In practice, two groups of events are dealt with most often. The first is damage arising from road traffic, where those involved are mandatorily covered by motor third-party liability insurance. This includes both property damage and harm to health and life. The second group is damage covered by property insurance, typically in connection with natural disasters – torrential rain, floods, landslides or fires.
The claims process is essentially similar for all types of insurance. It differs, however, in the details depending on the specific policy terms, so it pays to read the contract and the general terms and conditions before you report anything to the insurer.
For all types of insurance, the claims process is essentially similar:
The insured event must be reported to the insurer as a rule without undue delay – the exact deadline is usually set out in the policy terms. You then follow the instructions of the insurance company, which carries out the claims adjustment. Above all, the insured party documents the occurrence, extent and consequences of the event and, where applicable, allows the insurer to inspect the damaged item.
In the report, you must state all relevant facts truthfully. If you provided false or grossly distorted information, or concealed anything, the insurance company may require you to reimburse the costs it incurred in obtaining such information during the investigation. It is therefore worth reviewing the report once more before sending it.
At the same time, inform the insurance company of any rights of third parties –> or if you have other insurance covering the same event with a different insurer. And watch out for one practical point: the claim does not have to be made directly by the person entitled under the contract. The claim may also be filed by another person with a legal interest in the insurance payout, typically a husband or wife.
“Already at this stage, it makes sense to consider being represented by an insurance broker or a lawyer. Most people only do so once the insurance company has refused to pay – and by then it is often too late,” adds attorney Martin Tůma.
After the event is reported, the insurance company opens an investigation without undue delay. It establishes whether the event falls within the coverage, what its extent is and how much loss needs to be compensated. Claims adjustment is carried out either by the insurer’s internal departments or by external specialized companies.
The investigation ends when the insurance company informs you in writing of its outcome and the amount of the benefit granted, or gives its reasons for rejecting the claim. As a rule, it should do so within 3 months of the date the event was reported. If the insurance company accepts the claim, it must pay the benefit within fifteen days of communicating the results of the investigation.
It is worth remembering here that the right to insurance benefits is not automatic. Except in expressly agreed situations, the insurance company does not pay if you caused the insured event yourself.
A typical example is driving under the influence of alcohol: the insurance company will cover the damage to the injured party under motor third-party liability insurance, but it will then seek to recover the payout from you.
This is where the road forks. Either you accept the amount the insurance company has offered – or you start to push back.
The first and simplest step is to file a complaint directly with the insurance company. Your case is then usually handled by a different department, which may reconsider the original conclusion and increase the payout. Or reject the complaint. It is not unusual for the claim to be successfully resolved already at this pre-litigation stage – without going to court and without the associated costs.
If the complaint is unsuccessful, you can use out-of-court dispute resolution through the Czech Trade Inspection Authority (ČOI) or the Ombudsman’s Office of the Czech Insurance Association (ČAP).
“If it is expedient for a lawyer to take on legal representation at the pre-litigation stage and the lawyer succeeds, you are entitled to a lump-sum reimbursement of the costs of proceedings from the insurance company – just as if these were steps taken before a court. Insurance disputes therefore do not have to be as financially risky as people often think,” says attorney Martin Tůma.
When all pre-litigation negotiations fail or end in only partial success, the remaining option is to file a lawsuit. In a dispute with an insurance company, the insured party can rarely manage without a lawyer – the demands of argumentation and procedure increase rapidly here.
A court dispute usually revolves around three questions.
Disputes often arise over whether the loss event is included among the insured risks. In some cases, this is purely a matter of the legal interpretation of the policy terms, and the court decides. In others, the question is a technical one – it is necessary to call an expert witness to assess whether, for example, the physical cause of the damage meets the definition in the policy terms. Experts also often assess the credibility and likelihood of how an accident unfolded when the insurance company disputes the extent of the damage.
The subject of the dispute is not infrequently the amount of the damage or non-pecuniary harm caused. Here, too, experts usually have the main say – whether it concerns valuing the cost of repairs or a replacement vehicle rental, or determining the decrease in a vehicle’s market value as a result of the insured event.
A frequent subject of dispute is the interpretation of the policy terms themselves, i.e. whether, and up to what amount, the loss incurred is covered by the agreed insurance at all. Policy terms are not infrequently ambiguous. And if they allow for two interpretations, it must be assessed whether they should be interpreted in the way that is more favorable to the insured – as is generally the case with contracts concluded with consumers.
A dispute over payment of insurance benefits can be demanding both in terms of evidence and law. An experienced lawyer, however, is able to soberly assess the claim and the chances of success and recommend a course of action that will lead to the claim being pursued effectively – while keeping the risk of failure as low as possible.
“Insurers usually do not litigate on principle. They litigate out of obligation. An insurance company must act with due managerial care, which is why it is reluctant to accept insurance claims it does not consider clear-cut. But once the court of first instance has ruled, or a disputed issue has been sufficiently clarified, the insurer’s willingness to settle the dispute amicably increases significantly,” adds attorney Martin Tůma.
That is good news for policyholders. If the claim has a solid basis, court proceedings often do not have to go all the way to a final judgment — the parties reach an amicable settlement.
If you currently have an open insurance claim and disagree with how the insurance company has handled it, get in touch. We will assess your chances, propose a course of action and – if it makes sense – represent you as early as the pre-litigation stage, when many disputes can be resolved faster and without the costs associated with court. Just fill in the form, write to us at info@endors.cz or call us at +420 601 501 630 and we will go through your entire case with you
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