The uncontested part of an insurance claim – how does it affect the rights of insured persons?

Published on 16 April 2021

When processing insurance claims, in cases where the justification of a claim is uncontested, but its full processing and the determination of the final amount of damage would require a considerable period of time in relation to the statutory time limits, or where no settlement is reached with the claimant, insurance companies must pay the uncontested part of the claim as an advance. However, on the basis of the consumers’ complaints received, it has been observed that, in some cases, users of insurance services enter into disputes with insurance companies during claims processing, concerning the uncontested part of the claim, considering it to be the settlement amount and the final payment per claim. In such cases, the claimants hesitated to provide insurance companies with the necessary information (account number) for the payment of the uncontested part of the claim, as they considered that this would eliminate the possibility for the insurance company to subsequently pay any difference up to the final amount of the damage. In other words, the claimants considered that the payment of the uncontested part of the claim was a kind of final settlement with the company, which implied a waiver of the possibility of any additional payment.
However, the payment of the uncontested part of the claim is legally prescribed precisely in order to compensate the claimants in a timely manner and at least partially in those cases where the complexity of the case or the timely unavailability of all the information and facts requires a longer period than legally provided for the processing of the claim, i.e. in those cases where no final agreement is reached between the insurer and the claimant regarding the amount of the damage. The uncontested amount of the claim is prescribed by the Act on Compulsory Traffic Insurance (Official Gazette, No 151/05, 36/09, 75/09, 76/13 and 152/14) and the Civil Obligations Act (Official Gazette, No 35/05, 41/08, 125/11, 78/15, 29/18) according to which insurance companies are obliged to act when processing claims.

If an insurance company fails to pay compensation or its uncontested amount within the statutory time limits (14/30/60 days – depending on the insurance class and the complexity of the claim processing), the claimant shall be entitled to receive the amount of compensation due, i.e. the uncontested part of the claim plus interest, from the day on which the claim was filed, i.e. from the day on which the company received the notification of the insured event. The claimant shall also be entitled to compensation for the damage resulting therefrom.
Hanfa would like to point out that the payment of the uncontested part of the claim does not constitute a “final settlement”, and that there is a possibility for the insurance company to make an additional payment of damages in subsequent proceedings. Moreover, if the claimant does not agree to the amount of the damage established and does not agree to the amount of the compensation offer, the company should pay the amount offered as the uncontested part. The final payment of damages will be made upon the conclusion of the settlement between the insurance company and the claimant (possibly also within the framework of out-of-court mediation; more information is available on the website of the Croatian Chamber of Economy and the Croatian Insurance Bureau) or on the basis of a final decision of the competent court in case of a dispute.
Hanfa expects insurance companies, in accordance with good practice, to inform the users of insurance services in an appropriate manner about the impact of the payment of the uncontested part of the claim on their rights and the final amount of the damage. They should clearly inform users of insurance services about this when sending a settlement on the amount of damage, so as not to be in doubt about what accepting or not accepting the settlement means for their rights.