Contact center
(from Russia)
ext 00020 (from abroad)
Monday - Friday from 8:00 to 20:00 (Moscow time), except public holidays, free call from regions of Russia
10 october 2023, 12:58
Some insurance companies in their practice in hull insurance contracts have started to use wording that minimises the possibility of receiving insurance payment by the consumer on the risk of unlawful acts of third parties, according to Financial Ombudsman Svetlana Maximova.
Svetlana Maximova pointed out that a consumer who had a hull insurance contract applied to the insurance company for payment after he had discovered mechanical damage to the right rear door and the right rear wheel arch while wiping snow off his car. The consumer had been refused to initiate a criminal case due to the absence of the event of the offence, and the reasons for the formation of the damage had not been recorded in the relevant order. And the insurance company refused both the monetary payment and the arrangement of car repair, arguing that it was impossible to determine from the documents provided by the consumer what event had caused the damage to the car.
However, the hull insurance contract stipulates a number of insurance risks, including “Unlawful Acts of Third Parties” (UATP). In the insurance policy itself, there is a reference norm to the company’s internal insurance rules, where this very term is already defined. The term UATP implies “damage, total damage or loss of separate parts, units or aggregates of the insured vehicle and/or optional equipment, which occurred as a result of such crimes as theft, burglary, robbery, disorderly conduct or intentional infliction of harm, as well as socially dangerous acts containing any or all signs of these crimes, criminal proceedings on which cannot be initiated (are subject to termination), except for cases when there is no criminal event”.
“The exclusion in the insurance rules regarding the absence of a criminal event severely limits the cases of receiving a payout under the UATP risk to criminal offences only. After all, we understand that quite often there are situations where a person sees damage to their car and cannot expect to initiate prosecution, as it is impossible to determine the circumstances under which the damage was inflicted. We regard such conduct of the company as knowingly dishonest, such wording reduces the consumer value of the insurance contract,” Svetlana Maximova emphasised.
The Financial Ombudsman added that a similar situation was the subject of consideration by the Russian Supreme Court back in 2020. The highest judicial instance specified that the presence of damage to the vehicle indicates the possibility of an insured loss. And it is up to the insurer to prove that the damage inflicted is not damage caused as a result of the actions of third parties.
Svetlana Maximova reiterated that the Financial Ombudsman Service (FOS) quarterly publishes unacceptable practices of organisations identified by Financial Ombudsmen and sends this information to the Bank of Russia, which has the right to apply supervisory measures.
The Financial Ombudsman drew attention to the fact that when concluding a contract and signing documents, one should read both the text of the contract itself and the insurance rules of the financial institution, especially the exclusions from the insurance coverage.
