Insurance matter finally surfaces six months later.
In a landmark ruling on July 14, 2020 (Case No. IV ZR 153/20), the Federal Court of Justice (BGH) provided crucial clarifications regarding the timing of the insurance event in disability insurance (DI) claims. The ruling, which has significant implications for policyholders and insurers alike, reinforces the importance of fair and timely benefit payments.
Determining the Insurance Event Timing
The BGH emphasized that the insurance event—i.e., the onset of the insured incapacity to work—must be assessed precisely, based on the actual ability of the insured person to perform their occupational activities. This timing is crucial because it triggers the insurer’s obligation to pay benefits.
Focus on Objective Medical Facts
The court ruled that the assessment should rely on objective medical evidence available at the relevant time rather than retrospective reinterpretations. The insured’s functional impairment must be established as occurring at that time.
Preventing Arbitrary or Retrospective Postponements
Insurers cannot arbitrarily shift the insurance event later based on improved medical findings or events occurring after the relevant period. This protects insured persons from undue denial or delay of benefits.
Legal Certainty for Policyholders and Insurers
By setting clear standards for when the insurance event occurs, the ruling enhances legal certainty. Policyholders can rely on the insurer’s obligation from the date when incapacity actually sets in, while insurers gain guidance on properly timing their examination and payment duties.
Impact on Benefit Entitlement Duration and Calculations
Since the insurance event defines when benefit payments begin, the ruling influences how long benefits are payable and affects any waiting period calculations under the policy.
The Plaintiff's Case
In a separate case, specialist lawyer Tobias Strübing, a partner at the Wirth law firm, successfully argued before the BGH for a client who had a renewal guarantee in a disability insurance. The client suffered a work accident on July 29, 2016, and has not been able to work since. Despite the higher pension already being agreed upon by the time the six-month period mentioned in the first alternative was completed, the DI initially paid a pension of 500 euros per month, not the agreed-upon 1,000 euros.
On October 11, 2016, the client demanded from his insurance company to double the insurance protection, i.e., the disability pension due in case of disability. The six months agreed in the first alternative were calculated from July 29, 2016, and were only completed in January 2017. The DI granted the disability pension to the plaintiff in September 2017.
The BGH's interpretation of the first alternative in this case means that the insurance event "disability" has a retrospective effect only after the end of the six-month period mentioned in the clause. As a result, the plaintiff is entitled to a total of 1,000 euros per month as DI pension instead of 500 euros.
Implications for Policyholders and Insurers
The BGH ruling in IV ZR 153/20 reinforces that the timing of the insurance event in disability insurance is grounded in the actual onset of medically demonstrable incapacity to work, determined by objective facts available at that time. This ensures fair and timely benefit payments and prevents insurers from denying or postponing claims based on retrospective considerations.
If you need a detailed legal analysis or implications for a specific case, consulting a legal expert specializing in insurance law is advisable.
In light of the BGH's ruling in IV ZR 153/20, it is essential for the insurance event in disability insurance to be based on the actual onset of medically demonstrable incapacity to work, relying on objective facts available at that time, rather than retrospective considerations. This determination is crucial for ensuring fair and timely health-and-wellness benefits, as it triggers the insurance company's obligation to pay, and can impact the duration and calculations of benefit entitlements.
Moreover, this ruling underscores the significance of objective medical evidence in the assessment of health-and-wellness claims, emphasizing that insurers cannot arbitrarily or retroactively deny or postpone benefits based on improved findings or events occurring after the relevant period. The focus on scientifically verified health issues is vital to protect policyholders from undue denial or delay of benefits.
