Article (in Estonian): O.-J. Luik, K. Haavasalu, "Kindlustusmakse tasumise kohustus kui kindlustusvõtja põhikohustus kahjukindlustuses" (The duty to pay the premium as the policyholder's main obligation in non-life insurance), Juridica 2010/3, pp. 184–195. Article page on Juridica (published 2010)
Co-author: Karl Haavasalu.
Research question
The insurance contract is bilateral: the policyholder must pay premiums and the insurer must indemnify when the risk materialises (Law of Obligations Act (võlaõigusseadus, VÕS) § 422(1)). The article addresses practical questions: how premiums are paid, what happens if the policyholder pays late, pays less or does not pay, who may collect premiums, and who must send the statutory notices and how.
Main arguments
The article analyses the premium obligation in non-life insurance and the legal consequences of improper payment, distinguishing late first and subsequent premiums and the insurer's options of withdrawal, termination or release from performance.
Relevance for insurers
The basic scheme still applies. If the first premium is not paid within 14 days of conclusion, the insurer may withdraw from the contract until payment (VÕS § 457(1)). For a late subsequent premium, an insurer that wishes to rely on the delay must set, in a form reproducible in writing, an additional period of at least two weeks, or at least one month where a building is insured, and the notice must state the legal consequences of the expiry of that period (VÕS § 458(1)). The Supreme Court has stressed that these provisions cannot be varied to the policyholder's detriment and that the insurer must notify, invoice and warn the policyholder before cover ends.1
Related pages
References
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Supreme Court Civil Chamber judgment of 16.05.2006, 3-2-1-51-06, para 13. https://www.riigikohus.ee/et/lahendid?asjaNr=3-2-1-51-06 ↩