It is hard to believe that a man is telling the truth when you know that you would lie if you were in his place (H. L. Mencken).
As practice shows, insurers have an imperfect habit to refuse to pay insurance claims.
Consequently, a necessity of writing of this article arose. The main purpose of the article is to inform present and potential consumers of insurance services about their legal rights and duties, аs well as to prevent the insurers` fraud.
You should clearly understand that the insurance companies initially carry out their activities in order to obtain their own profit and not for the purpose of an instant payment of insurance compensation.
Therefore, the first and primary goal for them is to create difficulties for the confirmation of the insurance case. In such a way the mentioned companies condition a non-payment of insurance compensation. The insurance company is ready to start the abovementioned process upon you pay the insurance remuneration to enter the insurance contract.
In connection with this, when signing an insurance contract, you should pay attention to all provisions in a contract (they may be "scattered" throughout the contract) that regulate the confirmation of the insured event and the terms of payment of insurance compensation.
It does not pay to sign the contract and pay money if you doubt at least a clause of a contract, because it is all for nothing and in such a case you will get nothing.
Such concepts as the insurance risk and insurance event are conceptual for the nature of an insurance contract that is why it is necessary to understand these concepts.
In accordance with the provisions of the Article 8 of the Law of Ukraine “On Insurance”, the insurance risk is a certain event that may occur and has the features of probability and chance of occurrence, and in the case of which the insurance may be carried out.
In turn insurance event is the event specified in the insurance contract and in the legislation as the insurance risk, that has already occurred and with the occurrence of which arises an obligation of the insurer (insurance company) to effect payment of the insured amount (insurance compensation) to the policyholder, insured or third party.
Consequently, the insurance risk is only probability of the occurrence of the relevant event, which in the case of occurrence that is also established by the contract becomes the insurance event.
Under the provisions of the Article 6 of the Law of Ukraine “On Insurance” an insurance contract may establish cases for a voluntary insurance, which are stipulated by the insured and the insurer.
In turn, the legislation of Ukraine establishes and regulates insurance cases of obligatory types of insurance. Under the provisions of the Article 7 of the Law of Ukraine “On Insurance”, the mentioned cases may include:
- medical care insurance;
- personal insurance of medical and pharmaceutical workers (except for those who work in offices and organizations, which are financed from the State Budget of Ukraine) in event of immunodeficiency virus infection while performing official duties;
- personal insurance of departmental workers (except for those who work in offices and organizations, which are financed from the State Budget of Ukraine) and workers of rural fire department and members of the volunteer fire brigades (teams);
- insurance of the top-level sportsmen;
- life and health insurance of the veterinary medicine specialists;
- personal traffic accident insurance;
- civil aviation insurance;
- liability insurance of marine carrier and contractor, whose activities are connected with maintenance of maritime transport, regarding compensation of losses caused to passengers, baggage, mail, cargo, other users of the sea transport and to the third parties;
- civil liability insurance of the owners of vehicles;
- insurance of watercraft;
- insurance of civil liability of the operator of a nuclear facility for nuclear damage that may be caused by a nuclear incident;
- insurance of workers, who are involved in providing psychiatric care, including caring for people with psychosocial disabilities (except for those workers, who work in offices and organizations, which are financed from the State Budget of Ukraine);
- insurance of the commercial entities’ civil liability for the harm that may be caused by fires and accidents at high risk facilities, including fire and explosive objects and objects, which operation may cause environmental and sanitary-epidemiological accidents;
- insurance under the production sharing agreement of the investor’s civil liability including the liability for damage, which is caused to the environment, human health, unless otherwise is provided under such an agreement;
- insurance of the property risks, which may occur under the agreement for the distribution of products in the cases provided by the Law of Ukraine "On Production Sharing Agreements";
- insurance of the financial responsibility, life and health of a temporary administrator, liquidator of a financial institution (in case of banks – of the authorized person of the Deposit Guarantee Fund), members of executive management and administration of the Deposit Guarantee Fund and employees of the central executive body that implements the government's financial policy aiming at solving issues concerning the participation of the state in the capitalization of the bank;
- insurance of property risks in the commercial development of oil and gas fields in the cases, which are provided by the Law of Ukraine "On Oil and Gas";
- insurance of medical and other workers of state and municipal health care institutions and public research institutions (except for those who work in offices and organizations which are financed from the State Budget of Ukraine) for diseases, that may be caused by working high-risk conditions of infectious agents contamination;
- liability insurance of the exporter and person, who is responsible for disposal of hazardous waste in relation to compensation for the harm that may be caused to human health, property and the environment during the trans-border movement and disposal of hazardous waste;
- insurance of space activity objects (ground infrastructure), which list is approved by the Cabinet of Ministers of Ukraine on the proposal of the central body of executive power, which in turn ensures the formation of state policy in the sphere of space activity;
- civil liability insurance of space activity members;
- insurance of space activity objects, which are the property of Ukraine (outer space infrastructure), for the risks related to the preparation for launching of space technologies at the cosmodrome and their launching and operating in outer space;
- liability insurance for risks connected with the preparation for the launching of space technology at the cosmodrome and its launching and operating in outer space;
- liability insurance of subjects of hazardous cargoes transportation for negative consequences occurrence during hazardous cargoes transportation;
- professional liability insurance of individuals, who are indicated in the list established by the Cabinet of Ministers of Ukraine and whose activities may cause harm to the third parties;
- liability insurance of dog owners for the harm that may be caused to the third parties (under the list of dog breeds determined by the Cabinet of Ministers of Ukraine);
- civil liability insurance of Ukrainian citizens, who legally own weapons, for any damage that may be caused to the third person or property due to possession, storage or use of these weapons;
- pet insurance for the death, destruction, forced slaughter, diseases, natural disasters and accidents in the cases and according to the list of animals established by the Cabinet of Ministers of Ukraine (except for those, which are used for agricultural production)
- insurance of liability of tourist activity entities for harm, which is caused to life or health of a tourist or tourist’s property;
- insurance of liability of the marine ship owner;
- insurance of power lines and power conversion equipment for damage due to the impact of natural disasters or man-made disasters and for unlawful actions of the third parties;
- insurance of liability of producers (suppliers) of animal origin products, veterinary preparations, substances for harm caused to the third parties;
- insurance of the mortgaged property for risk of the accidental destruction or accidental damage;
- insurance of the property transferred to the concession;
- insurance of the commercial entities’ civil liability for harm that may be caused to environment or human health by storage and usage of pesticides and agrochemicals;
- insurance of the commercial entities’ civil liability for harm to the third parties that may be caused by performing explosive works;
- insurance of property risks of the subsoil user during commercial production and using of gas (methane) and coal deposits;
- the volunteers’ life and health insurance for a period of volunteer assistance;
- insurance of civil liability of a private notary;
- insurance of risk for a non-payment of prizes to players in the event of insolvency and/or bankruptcy of the operator of state lotteries.
However, irrespective of a type of insurance you choose (voluntary or mandatory), you shall understand the risks and obligations that you obtain.
In this case, it would be better for you to act with a professional lawyer.
In order to minimize your expenses for lawyers, we decided to draw your attention to the main aspects of the insurance contract, which have a direct effect on the making decision on paying or not to paying the insurance compensation.
The above mentioned aspects include the exclusion of insurance events and the list of documents that you shall file to the insurance company in case of an insurance event occurrence.
The forgoing is crucial, whereas, under the provisions of the Article 991 of the Civil Code of Ukraine and Article 26 of the Law of Ukraine “On Insurance” the reasons for refusal to pay the insurance compensation include the following ones:
- intentional acts of the insurant or the person, in whose favor the contract of insurance is concluded, aimed at the occurrence of the insurance event;
- commitment of intentional crime by the insurant or the person, in whose favor the contract of insurance is concluded, which led to the occurrence of the insurance event;
- conscious provision by the insurant of false information about the subject of the insurance contract or fact of the insured event;
- obtaining a full compensation for damages under property insurance from the person, who is responsible for causing damages;
- the insurant’s untimely report about the accident without a clear reason or creation of obstacles for the insurer in determining the circumstances, nature and amount of damages;
- other cases provided by law.
However, the above listed norms reflect only the general grounds of the insurance company's decision to refuse you to pay insurance compensation.
Whereas, under the provisions of the Article 26 of the Law of Ukraine “On Insurance”, the insurance companies may establish other clauses of the insurance contract, which may be grounds for refusal to pay the insurance compensation and which do not contradict the legislation. The insurance companies enjoy it and successfully use such a possibility.
Non-compliance with the terms of the insurance contract is a common clause of the insurance contract, which further may be a ground for the refusal of payment.
The contract clauses are usually laid down in ambiguous way and in practice may be interpreted in the insurance companies’ favor.
In this regard, we consider that it is relevant to receive the qualified legal consultation.
The issue of the documents that you shall submit to the insurance company to obtain the insurance compensation is also rather complicated.
It should be noted that the Ukrainian legislation does not set an exhaustive list of documents that shall be submitted to the insurance company for the insurance compensation. It is provided by the insurance contract.
At the same time, insurance companies often require to provide the following documents:
- an insurance claim (in the form that is established by the insurer);
- a claim for indemnification (in the form that is established by the insurer);
- an insurance contract;
- a copy of the driving license of the individual, who drove;
- copies and originals of vehicle entitling documents;
- a reference of the prescribed form from the GAI or other competent authority, depending on the circumstances of the accident;
- a copy of the on-site inspection report;
- a copy of the protocol of the technical condition inspection of the vehicle, if the technical condition inspection is obligatory for the insured vehicle under the current Ukrainian legislation;
- a copy of the road accident scheme;
- a copy of the medical examination for the presence of alcohol, drugs and substance intoxication, when such examinations were held or shall have been held in accordance with the current legislation of Ukraine;
- confirmation documents on the additional costs incurred by the insurant in connection with the insurance event (checks, bills, statements of performed work, etc.) - depending on the conditions of insurance.
The mentioned list is very often supplemented by insurance companies and may contain documents that you will not be able to get in time as well as provide them to the insurance company.
Therefore, before signing the contract, you shall clearly understand what documents you shall receive and the period for their collection.
The procedure, terms and formula for calculating of the payment of insurance compensation shall also be clear.
The procedure of the decision making and terms of payments that depend only on the events that are caused by the actions of the insurance company (i.e., if the insurance company does not carry out these activities, the event will not occur and the period for payment compensation will not start), or the events that may never happen are often hidden in insurance contracts.
For example, it is a usual practice for insurance companies to set in contracts the term under which the time limit for adjudication and payment shall be counted from the date of receiving by the company the answer to their own inquiry to any expert organization.
Consequently, if the company does not appeal to the experts, the period will not come and you will never get your money.
In fact, the insurance contract that contains such conditions, nullifies your chances to obtain the insurance reimbursement and you need to think well before signing it.
The formula for calculating of the refund is not also precise.
In most cases it includes nonmathematical, complicated conditions.
For example, you will receive X money, if broken parts are transmitted to the insurance company, and Y - in the other case; if the damage is assessed by the expert of another insurance company, you will receive Z etc.
In connection with the abovementioned, we may conclude that the provisions of the insurance contract significantly determine the nature of relations between the insured and insurer. Therefore, at first you should elucidate all the aspects that you do not understand. After reading the contract, you should ask the seller the questions, paying attention to the quality of his answers. The level of knowledge and competence of the insurer indicates the status of the insurance company.
We advise you to examine carefully the insurance contract before its signing, and employ services of the insurance company that has gained the reputation of the reliable and trusted partner.
Whereas your legal rights and interests are violated, the insurance company refuses to pay the insurance indemnity payments or delaying the process, you have every reason to bring the matter before the court to protect your rights and legal interests.
Managing Partner of the Law Firm "FOX" Vladimir Marinich