This page is part of the overview of Estonian Supreme Court insurance case law. It collects 2 decisions of the Civil Chamber of the Supreme Court (Riigikohus) on this topic, in chronological order, with a short synthesis of the direction of the case law. The summaries are written in our own words; the judgments themselves are available in Estonian only. Abbreviations and citation conventions are explained on the overview page.
Synthesis
The provisions on payment of premium and late payment are partly semi-mandatory in favour of the policyholder: under VÕS § 427(1) an agreement derogating to the policyholder's detriment from § 454(2) and §§ 457–459 is void (the insurer's set-off right in § 456 is not on that list). The restriction does not apply to the contracts listed in § 427(2)–(4), such as reinsurance and large-risk contracts. The Supreme Court has construed them in the policyholder's favour: an insurer cannot rely on non-payment to be released from performance or, in motor insurance, to claim recourse, unless it has followed the mechanism of an additional payment period and a warning required for subsequent premiums. Where a contract ends early, premium may not be charged for any period in which there was no longer cover.
Decisions
RKTKo 16.05.2006, 3-2-1-51-06
Judgment · paras 12-14 · subsequent premium; VÕS §§ 457-458; motor insurance recourse; reasonableness
A motor insurer brought a recourse claim against its policyholder under the then § 48(2)(6) of the Motor Third Party Liability Insurance Act (liikluskindlustuse seadus, LKindlS) because the premium for the period of the accident had not been paid. The Supreme Court held that the claim must be assessed in light of the mandatory distinction in VÕS §§ 457 and 458 between the first and subsequent premiums: for a late subsequent premium the insurer must grant an additional period and may terminate only thereafter. From the principle of reasonableness (VÕS § 7) the chamber derived the insurer's duty to notify the policyholder before the policy expires, send an invoice and warn of the consequences.
Judgment on riigikohus.ee (Estonian)
RKTKo 30.09.2015, 3-2-1-94-15
Judgment · paras 10-12 · transfer of the insured object; termination; VÕS § 495(3); VÕS § 459
Where an insurance contract is terminated because the insured object has been transferred, the transferor must under VÕS § 495(3) pay premiums at most for the current insurance period. The Supreme Court clarified that premium may not be claimed for any time beyond the end of the contract, i.e. beyond the duration of cover, and pointed to the mandatory nature of VÕS § 459 (VÕS § 427(1)). The concept of the insurance period (VÕS § 453) does not entitle the insurer to charge premium for a period without cover.
Judgment on riigikohus.ee (Estonian)