Policy conditions examined critically
Everyone needs to rely on his or her insurance somewhere in life. If this occurs, it is desirable that the insurance company pays out the sum immediately. Some points rely on the policy conditions that have been agreed upon though.
Paying out damages
Unfortunately in reality this is not always the case. Paying out damages is not something insurers like to do, so they examine insurance claims extremely critically. This is not a bad thing in itself, because insurance premiums would rise if the companies would pay out unwarrantedly. On the other side insurance companies should not try to avoid their obligation – to pay out- when you are confronted with damage you wanted to cover with such an insurance and for which you have paid premiums.
Because companies want to cover specific situations, but explicitly want to exclude others, it is of great importance for insurers to define the coverage and grounds for exclusion concisely in policy conditions. This is quite a puzzle for the insurance companies. They are bound by legal requirements in formulating the policy conditions and the coverage. These legal requirements are meant to protect the interests of consumers.
Unclear policy conditions
This tension – between interests of insurance companies on the one hand and the protection of consumers on the other hand – causes the insurance policies to be written so complexly, with many dots, commas, buts and unlesses, that the average consumer is hardly, if at all, capable of understanding the provisions. Because of this, it can
be unclear for consumers whether the insurance company is right in stating that she is not bound to pay our damages, because the claimed damage is not covered by the insurance or because the coverage is excluded in the policy conditions.
The contra proferentum rule
Jurisprudence has created something for such situations: the contra proferentum provision. This rule states that unclarities or ambiguities in agreements – particularly when a specific sentence or parts of a sentence are open to different interpretations – must be explained to the detriment of the party that has drawn up the piece. For consumer this has been codified in a European directive and the Dutch legislator has described this for general terms in art. 6:238, section 2 BW (Civil Code). The background of this rule is that the risk for unclarity must be for the account of the one defining the actual texts. If this party meant something else, it should have been described more clearly.
For a long time, judges only applied this contra proferentum rule to the explanation of general terms. On April 22nd 2014 the Court of Justice in ‘s-Hertogenbosch has issued a ruling in which it was judged that the contra proferentum rule can (and sometimes should) apply to key matters. This brings the policy conditions also within the scope of the contra proferentum rule.
More information about policy conditions
Are you confronted with illegible or unclear policy conditions? Is it not clear for you whether or not your damage is covered by the insurance? Do you doubt whether your insurance company has rejected the coverage with a reference to policy conditions? You can – by invoking the contra proferentum rule – appeal to the for you most beneficial explanation of that provision. This can lead to coverage, and payment of the damages, where otherwise this would not have happened.
In case of doubts, we are glad to look at the used policy conditions. You can always call us if you experience such a problem. It’s our pleasure to help.