On May 7, 2021, a BMW was involved in an accident. Z. GmbH, which uses the vehicle, reported the damage to the other party’s motor vehicle liability insurance and demanded compensation. The documents seem clear: Z. GmbH is listed as the vehicle owner and the person who commissioned the report. Everything seems clear – the insurance company settles the damage and transfers a large amount of damages directly to Z. GmbH. It does this in good faith that Z. GmbH is entitled to receive the amount.
What the motor vehicle liability insurer did not know, however, was that Z. GmbH had only leased the BMW. The owner was actually a leasing company, which we will call “L. GmbH”. As the legal owner of the vehicle, L. GmbH assumed that it should be entitled to compensation. But instead it is left with the damage, while Z. GmbH received the money – but possibly did not use it to repair the vehicle, but for completely different things.
The steps to the lawsuit: How the case ended up in court
For L. GmbH, this was clearly a wrong decision on the part of the insurance company. They were of the opinion that the insurance company should have checked the ownership situation before making the payment to Z. GmbH. This belief ultimately led to the lawsuit. After the insurance company had paid the compensation to Z. GmbH, L. GmbH demanded that the amount be paid to them, the rightful owner of the vehicle. The damage should therefore be paid a second time – this time to L. GmbH.
The insurance company refused, pointing out that payment had already been made and that it had not acted with gross negligence. The leasing company then took the case to court. In the first instance, the Nuremberg-Fürth Regional Court (case no. 2 O 6786/21) ruled in favor of L. GmbH and decided that the insurance company was obliged to pay because it had not sufficiently checked the ownership situation. However, the insurance company appealed, arguing that there was no reason to doubt Z. GmbH’s entitlement and that it had acted in good faith.
Decision of the Higher Regional Court: No gross negligence on the part of the insurance company
The Higher Regional Court of Nuremberg (case no. 14 U 203/23) overturned the district court’s ruling and ruled in favor of the insurance company. The judges made it clear that the insurance company had acted in good faith in this case. “The insurer can generally trust that the information provided in the documents is correct, unless there is clear evidence to the contrary,” said the court. Since Z. GmbH was listed in the documents as the vehicle owner and the person who commissioned the report, the insurance company was entitled to assume that it was entitled to receive compensation.
Legal basis for good faith enables efficient claims settlement
Good faith is a central concept in German civil law. In the context of liability insurance, good faith means that the insurer can assume that the information available to it is correct and complete, unless there is evidence to the contrary. This assumption protects the insurer from the obligation to carry out extensive investigations in every case.
The insurer’s good faith is particularly relevant when there is no concrete evidence that the recipient of a payment is not entitled. The legal basis for acting in good faith can be found in various provisions of the German Civil Code (BGB), in particular in paragraphs 932 ff. BGB, which deal with the acquisition of property in good faith. Although these provisions primarily target the acquisition of property, the principle of good faith is also applied to other areas of law. In insurance law, good faith protects the insurer from having to trace the entire chain of ownership in detail for each payment – unless there is clear evidence of discrepancies.
No gross negligence on the part of the insurance company
Another important point of the ruling was that the insurer would only be obliged to pay again if there was gross negligence. Gross negligence occurs when the insurer fails to take into account something that is obviously reasonable or when it ignores clear indications of an incorrect payment. However, the court found: “In the present case, there was no indication that Z. GmbH was not entitled to receive compensation. The insurance company acted in good faith.”
Z. GmbH was listed in the documents as the vehicle owner and the person who commissioned the report. Since there were no indications that it was not entitled to claim compensation, the insurance company was entitled to assume that it was the rightful recipient.
Conclusion: Rapid regulation remains possible
The Higher Regional Court of Nuremberg made it clear: Insurers are not obliged to examine every claim report in great detail. As long as there are no clear signs of an unjustified claim, they can assume that the claimant is entitled to receive the payment. This judgment ensures that claims settlement remains quick and efficient – without the risk for insurers of having to pay twice in the end.
What options does L. GmbH have now?
Following the ruling by the Higher Regional Court of Nuremberg, L. GmbH still has a number of options for getting the money. It could take legal action directly against Z. GmbH to reclaim the amount, or try to reach an out-of-court settlement. In any case, L. GmbH must now consider how it can resolve the situation so as not to be left with the damage again.
