Insurance Contract Law: Are One-Year Limitation Periods Constitutional?

Jan 9, 2026 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) was tasked with deliberating upon the question of whether a policyholder’s claim for coverage is precluded as a consequence of non-compliance with the stipulated deadline under Section 12(3) of the Austrian Insurance Contract Act (Versicherungsvertragsgesetz, hereinafter VersVG). At the same time, for the first time in decades, the fundamental question arose as to whether this provision is constitutional at all.

The incident originated with a fire that caused damage to a residential property. In 2022, the insurer declined coverage, referencing Section 12(3) of the VersVG. The policyholder did not submit a claim until 2024. The lower courts subsequently dismissed the case on the grounds that the one-year limitation period had lapsed.

Specific provisions pose major challenges for policyholders

Established case law holds that the one-year deadline in Section 12(3) of the VersVG is a statutory limit -- once it expires, the claim is extinguished regardless of the decision’s correctness. The insurer can start this period with a qualified refusal and may provide reasons later in the process.

However, the OGH ruled that this construction gave the insurer an advantage that other debtors in private law did not have. Claims against the policyholder continue to be subject to the normal three-year limitation period, which is the usual time frame within which such claims must be brought.

In light of the principle of equality as stated in Sections 2 StGG and 7 B-VG, i.e., the Austrian State Fundamental Law on General Rights, and the Constitution), the OGH has expressed significant concerns.

Policyholders are typically the weaker party, yet the preclusion rule applies exclusively to them. The insurer is given the opportunity to change the limitation structure. They can do this unilaterally in their favour.

The insurer's interests, such as rapid clarification, avoidance of difficulties in proving claims and overview of assets, could be sufficiently safeguarded by existing information obligations and the creation of provisions.

In private law, comparable preclusion periods usually apply to both parties or to the weaker party.

Also, German lawmakers have repealed an almost identical provision in 2008, as it was no longer considered justifiable.

Accordingly, the OGH determined that the entirety of Section 12(3) of the VersVG should be submitted for constitutional review. Since the other clauses are inherently connected to the limitation rule, the application includes the full provision.

OGH 7 Ob 110/25i (22 October 2025)