Six-month-old insurance claim comes forth for review.
The Federal Court of Justice (BGH) has issued a landmark ruling in Case No. IV ZR 153/20, shedding light on a critical issue in disability insurance (DI). The ruling addresses the timing of the insurance event, which is when the disability is considered to have occurred for the purpose of triggering benefits.
Key Implications of the Ruling
The BGH has clarified that the insurance event in disability insurance is determined by the point in time when the insured person first meets the definition of disability under the policy—not merely when the disability is diagnosed or only when the insured starts to experience or report symptoms.
The court emphasized that the assessment should be based on the objective medical condition of the insured as of the relevant date, not influenced by later developments or treatment outcomes. This ruling affects when insured persons can claim benefits. If the disability condition exists before the claim is filed but meets policy definitions at that earlier time, benefits may be payable from that earlier date.
By setting clear criteria on timing, the decision provides legal certainty and reduces disputes over when coverage begins. Insurers may need to review and possibly adjust their policy terms and claims processes to ensure compliance with this interpretation, focusing on the earliest point at which the disability criteria are objectively met.
Case Details
The plaintiff in this case had agreed to a renewal guarantee with his DI, allowing for increased insurance coverage without a new medical risk assessment. On October 11, 2016, the plaintiff demanded that his insurance double the insurance coverage, i.e., the disability pension.
The plaintiff suffered a work accident on July 29, 2016, and has been unable to work since then. The insurance event in a DI occurs at the end of a six-month period, as per the BGH. The first alternative requires a retrospective consideration, only possible after the end of the six-month period.
The plaintiff's disability pension was initially set at 500 euros per month. However, the BGH's judgment means that the plaintiff is entitled to 1,000 euros per month as DI pension instead of 500 euros. The higher pension entitlement for the plaintiff became effective from January 2017.
The BGH interpreted the first alternative as the insurance event "having occurred only after the end of the six months." The DI confirmed this request in writing on October 18, 2016, effective November 1. The six months agreed upon in the first alternative were calculated from July 29, 2016.
Tobias Strübing, a specialist lawyer for insurance law and partner of the Wirth law firm, represented the plaintiff in the case. The court clarified that the insurance event "disability" regulates two alternatives. The second alternative is directed towards the future.
This ruling underscores the importance of understanding the specifics of disability insurance policies and the timing of the insurance event. It provides a clearer path for insured individuals to claim benefits when they are entitled to them and offers legal certainty for both insurers and insured.
- The BGH ruling in disability insurance (DI) shows that the insurance event should be based on the point when the insured person meets the definition of disability under the policy, even if this occurs before the diagnosis or reporting of symptoms, thus affecting retirement age and health-and-wellness considerations.
- In light of the BGH decision, it's crucial for individuals planning their retirement and health-and-wellness management to understand the specifics of their DI policies, as the timing of the insurance event can significantly impact the benefits they are entitled to receive.
