| Abstract [eng] |
Legal Consequences of Breach of the Insured’s Obligations under an Insurance Contract Insurers can try to exploit policyholders’ lack of information on insurance. They incorporate ambiguous and misleading clauses in the insurance policy. Insurers try to imbed insured’s contractual obligations in such manner that their breach would evoke the strictest legal consequences. By using limited policyholder’s understanding of insurance contract law, insurers interpret terms of insurance contracts lucratively. Such abuse causes concern. Insurers are private enterprises. Insurers by seeking to increase their profits can attempt to impose stricter sanctions than it would be just on the insured for breach of his contractual obligations. Jeopardy arises that the insurer will impose sanctions on the policyholder in an abusive manner. The subject matter of this writing is legal consequences of the insured’s obligations under an insurance contract. Provisions of the Civil Code on breach of contractual duties and civil liability are being analyzed together with special provisions of insurance contract law. Their comprehensive and systematic study reveals the scope of sanctions available for insurer’s use and the conditions that must be met before applying the sanctions. At the present the number of disputes between insurers and policyholders is increasing. The reason behind the disputes often is lack of clearness in legal regulation. Insurers abuse the lack of clearness by abusively interpreting the law and repudiating their contractual obligations. The lack of lack of clearness in legal regulation must be eliminated. The goal can be achieved by modifying positive law or by judicial precedent. The courts vigorously protect the insured because he is considered the weaker party. By protecting the policyholder, the courts often find sanctions imposed on the insured to be unjust and disproportionate. This can lead to baseless expenditure of insurance coverage. The insurer may be forced to pay ex gratia indemnity payments. Also, the breach of insurance contract is not punished. Legal consequences of breach of the insured’s obligations under an insurance contract must be balanced. On one hand, it must be made possible for the insurer to effectively punish the policyholder for failure to comply with the terms of the contract. He must be able to effectively control the assumed risk. On the other hand, insured’s interests must be protected. It is of paramount importance to ensure that the interpretation of laws on legal consequences of breach of insurance contracts would strike the right balance between the interests of the insurer and the insured. |
