Insurance Coverage for Rainwater Damage

Feb 2, 2024 Benn-Ibler Rechtsanwälte

The interpretation of general policy conditions is based on the standard of the average policyholder. The apparent purpose of a provision must always be taken into account.

The plaintiff took out a bundled insurance policy with the defendant. Special condition No. 6808 of the REAL-Star storm insurance (BB 6808) reads in part as follows:

BB 6808: 1.3. […] The Insurer will also pay indemnity if parts of the building inside the insured premises are damaged or destroyed by precipitation (rainwater, snow or hail) entering the building through parts of the roof or walls or through properly closed windows or external doors [...].

On the plaintiff’s property there is an apartment building with several atriums equipped with a floor drain. In July 2021, a storm caused such heavy rain that the rainwater accumulated in the atriums and was unable to flow off. The interior of the apartment block was damaged as the water penetrated the building’s brickwork.

The plaintiff's claim against the defendant was for compensation for the damage. The defendant argued that the case in question was one of flooding and that this type of damage was excluded from the insurance cover.

The OGH ruled as follows:

Ambiguities in general insurance policies are generally to the detriment of the insurer. Limitations of risk that exclude the scope of the insurer’s cover must not be interpreted more broadly than is required by their meaning, taking into account their economic purpose and the wording chosen, as well as the regulatory context.

In this case, rainwater has accumulated and penetrated the masonry of the house. Contrary to the defendant’s view, this does not constitute flooding. The average policyholder’s understanding of the term ‘flooding’ is not that of a small event such as rain water penetrating the masonry in an atrium.

Therefore, the damage suffered by the plaintiff is covered by the insurance.

OGH 7 Ob 113/23b (22 November 2023)