GER: BGH on the Intelligibility of Insurance Contracts

Sept 13, 2024 Benn-Ibler Rechtsanwälte

In the event of an illness, insured persons have an interest in knowing exactly what is covered by their health insurance policy. The German Federal Court of Justice (Bundesgerichtshof, hereinafter BGH) has now considered an exclusion clause in the general conditions of a travel insurance policy.

In general, insurance companies have the right to refuse to pay for certain types of treatment that have become necessary because of an illness. These cases in contained in specific exclusion clauses.

A dispute between two insurance companies concerning the assumption of costs for hospital treatment abroad was the background to the case at hand. The insured person had taken out a health insurance policy with the plaintiff insurance company for treatment abroad. However, he was also covered by an international health insurance policy with a different insurance company by means of his credit card. It is generally possible to have multiple insurance coverages from different providers. In the event of a claim, the insurance company that paid the costs can demand reimbursement of half the costs from the other insurance company under the German Insurance Contract Act.

While travelling abroad, the insured had to undergo in-patient treatment for type 2 diabetes. The plaintiff’s health insurance company initially covered both the treatment and the transport costs. However, it then claimed half of the costs from the other insurance company. The latter, however, referred to the following clause in its terms and conditions: ‘There is no obligation to provide benefits in the case of a pre-existing condition known to the insured person.’ In the case at hand, the insured person was well aware of the fact that he had diabetes.

The validity of the clause in question is now the subject of the following ruling by the BGH:

The clause in its present form is in breach of the principle of transparency and is therefore invalid. In the case of an exclusion clause limiting insurance cover, policyholders must be informed of the disadvantages in such a way that they can understand the scope of insurance. The clause in question does not meet this requirement.

According to the BGH, the average insured person is not able to deduce with sufficient clarity from this vague wording when the insurance company’s obligation to provide benefits is to be excluded. It remains unclear which illnesses in particular lead to an exclusion of benefits.

BGH IV ZR 129/23 (10 July 2024)