The Federal Court of Justice has in his Judgment of 10 July 2024 – IV ZR 129/23 – again with the requirements for Exclusion clauses in Insurance contracts This decision rightly strengthens the position of policyholders. In the following blog I explain the background of the case and its significance for policyholders.
Background of the case
This case concerned a dispute between two insurers who were arguing about the cost of hospital treatment. The policyholder had taken out international health insurance and also had a credit card with additional international health insurance as an additional benefit. One of the insurers covered the cost of diabetes treatment during a stay in the USA and then demanded half the reimbursement from the other insurer. However, the latter refused, citing a Exclusion clause which services “in the case of a previously known medical condition” excluded.
Principles on the transparency of exclusion clauses in insurance contracts
The BGH ruled that the insurance company could not rely on this exclusion clause. It made it clear that exclusion clauses in health insurance contracts Transparency requirement of Section 307 Paragraph 1 Sentence 2 of the German Civil Code (BGB).
Exclusion clauses that limit insurance coverage must be formulated in such a way that the policyholder is aware of the associated Clearly recognizes limitations and the Scope of the remaining insurance coverage comprehend The decisive factor is what the average policyholder of such a contract. The policyholder must be able to understand the scope of his insurance without legal advice.
Invalidity of the exclusion clause – The reasoning
The Federal Court of Justice declared the exclusion clause used in the present case to be unclear and non-transparent.
For the average policyholder, it was not visible, under what circumstances the insurance would not provide any benefits. It was difficult for him to assess which health restrictions could lead to an exclusion. He does understand from the clause that the term “medical condition” is not used as a synonym for a general health condition that can be either good or bad. Instead, it is clear that an illness is meant in the narrower sense – an objectively determined, deviating physical or mental condition that results in a significant impairment of functions.
The clause defined however not clearwhich medical conditions lead to exclusion Instead, only a non-exhaustive list of examples is provided, which does not give the policyholder sufficient clarity as to which other conditions could be covered by the exclusion.
In addition, it remains unclear to what extent the insurance company should be exempt from the obligation to pay benefits. For this reason, the exclusion clause was classified as non-transparent and ineffective.
Exclusion clauses in insurance contracts – we advise you
For Policyholder This judgment is a positiveIt is becoming increasingly common for insurers to rely on Exclusion clauses to avoid their obligation to perform. In such cases, it is advisable to have the clause signed by a Lawyer for insurance law If there are any ambiguities or non-transparent wordings, it may be worth confronting the insurance company and, if necessary, enforcing the claim for damages in court.
As an experienced Lawyers for insurance law we are happy to assist you. If your insurance company regulation refuse or on a Exclusion clause please do not hesitate to contact us contact.
