Compensation payable by an insurer under property insurance

Under Article 386(2) of the Insurance Code, compensation must equal the loss on the date of the insured event. It is to be assessed by reference to the market value of the damaged property on the date of the damage. The parties may agree the insurance indemnity in the property insurance contract. When a covered event occurs, Article 405(1) of the Code (formerly Article 208(1) of the repealed Code) requires the insurer to pay the insured the agreed indemnity in an amount calculated under the Code rather than the insurer’s own methodology. Established case law interprets Article 386(2) (formerly Article 208(3)) as requiring compensation equal to the loss on the day of the event, with the insured bearing the burden of proving that loss. Compensation cannot exceed the actual value in the event of total loss, or the reinstatement value in the event of partial damage. The former is the price of purchasing another item of the same quality (Article 400(2), formerly Article 203(2)); the latter is the cost of restoring the property to the same condition (Article 400(3), formerly Article 203(3)). The Supreme Court of Cassation has ruled on this issue, for example in Judgment No. 115 of 9 July 2009 in commercial case No. 627/2008.

If you have questions about a road accident or comprehensive motor insurance (‘Casco’), or an insurer has refused payment under a property liability policy, it is advisable to consult an insurance lawyer experienced in litigation, tort claims and unpaid compensation.

If you have received a summons, a statement of claim or a notice to appear in court, consult a lawyer promptly about your rights and the steps needed to protect your interests.