Austrian OGH: No Insurance Cancellation after Universal Succession

May 16, 2025 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) has ruled that a policyholder who acquires ownership of a property partly through testamentary succession (e.g. a transfer agreement) and partly through universal succession (e.g. an inheritance or purchase of an inheritance) is not entitled to terminate an insurance contract under Section 70(2) of the VersVG (Austrian Insurance Contract Act). This OGH ruling clarifies a previously controversial issue, confirming the restrictive interpretation of the right to terminate insurance contracts in the event of a change of ownership.

In the case at hand, the claimant was initially a co-heir after her father had deceased and later acquired all shares in the insured property through transfer, inheritance, purchase, and an inheritance distribution agreement with her sisters. Having become the sole proprietor, she terminated the existing property insurance policy. However, the insurance company refused and issued a new policy. The claimant then sought a court ruling that the insurance contract had been terminated with effect from 1 November 2023.

The courts of first instance dismissed the action, argueing that the right of termination under Section 70(2) of the Austrian VersVG does not apply to this case because this provision only grants the purchaser of an insured item the right to terminate the contract with the insurer in the event of a transfer of ownership through testamentary succession. The OGH confirmed this view, stating that acquisitions by inheritance, purchase of an inheritance, or inheritance distribution agreements are considered universal succession and do not constitute a transfer within the meaning of Sections 69 and 70 of the VersVG. The court expressly rejected the analogous application of the right of termination, as there is no gap in the law contrary to the lawmakers’ intention. Such an application would fail because the interests underlying universal succession differ from those underlying Sections 69 and 70(2) of the VersVG, which are specifically geared towards testamentary succession.

The objective of Section 70(2) of the VersVG — to give the acquirer the freedom to choose insurance coverage after individual legal succession — does not automatically apply to heirs, since they inherit all of the deceased’s legal relationships by law. Therefore, an analogous application would undermine the lawmakers’ obvious intentions.

OGH 7 Ob 5/25y (19 March 2025)