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The claimant in a recent case took out an accident insurance policy with the defendant, which incorporated the 2000 version of the Accident Insurance General Terms and Conditions (AUB).(1) After some time, the claimant applied to amend the policy with the aim of excluding his daughter from cover. The application was made on a form which incorporated the 2013 version of the AUB. In deviation from the dismemberment schedule in the AUB 2000, the AUB 2013 listed only 'arm' and no longer 'arm in shoulder joint'.
As the claimant injured his shoulder joint but not his arm, he sought payment from the defendant.
The first-instance court dismissed the claim.
In its indicative opinion – subsequent to which the appeal was withdrawn – the Hamm Higher Regional Court expressed that it was inclined to uphold the first-instance court's decision and dismiss the appeal.
The court rejected the claimant's primary argument that the insurance contract had been amended not to incorporate the AUB 2013, but only to exclude his daughter from cover. The clear wording of the application at issue, referring expressly to the AUB 2013, could be understood only by an objective receiver as a declaration of intent by the claimant to amend the contract in accordance with the wording.
The court also rejected the claimant's secondary argument that the defendant had breached its statutory duty of Section 6(4) of the Insurance Contract Act to advise the claimant in relation to the amendment and was thus obliged to pay damages corresponding to the lost insurance cover.
The court concluded that an obligation to advise did not arise due to the terms of the AUB 2013 being overall less advantageous to the claimant. To the contrary, the defendant had stated the opposite and had not been challenged by the claimant.
Further, the court stated that where, as in the present case, policy amendments are partly advantageous and partly disadvantageous to the assured, the insured has no general duty to inform the assured of all deviations in detail. In certain cases regarding particular substantial amendments, an obligation to advise may be established. However, the present amendment from 'arm in shoulder joint' to 'arm' did not form such substantial amendment. It was a linguistic adjustment of a clause affecting a small part of the cover and only a small number of cases – namely, those concerning damage to the shoulder joint, which did not also affect the arm. The fact that the claimant had suffered exactly this type of damage after the amendment had been undertaken did not change the fact that the amendment was not of such substantial character to oblige the insurer to consult the assured at the time of the amendment.
Although the German courts consider insurers' duty of advice to be extensive – particularly with regard to transparency – this ruling is unsurprising; it continues the previous case law in respect of partly favourable and partly unfavourable new conditions or conditions that are merely more favourable for the policyholder. In these cases, insurers need not advise the assured of all changes in detail at the time of the amendment. Insurers need do so only in respect of particularly substantial (disadvantageous) amendments. A linguistic adjustment concerning a small number of cases and affecting only part of the scope of cover is not a substantial amendment, regardless of the individual impact on the assured.
Endnotes
(1) Indicative Opinion of the Hamm Higher Regional dated 23 January 2019 (case 20 U 160/18).
