The Supreme Court confirmed the payment of over UAH 4.4 million for CASCO due to the theft of Bentley parts in Austria

The panel of judges of the First Judicial Chamber of the Cassation Civil Court considered case No. 947/39673/23 on a claim against an insurance company for the recovery of UAH 4,493,924.23 in insurance compensation.

According to the case materials, the plaintiff concluded an "All-inclusive" CASCO contract for a 2017 Bentley Bentayga vehicle, with an insured amount of UAH 6,500,000, a deductible of 0.5%, and an insurance premium of UAH 210,600. The contract coverage extended, among other places, to the territory of the European Union countries.

The plaintiff stated that on March 4, 2023, in Austria (Traunkirchen, Seehotel Das Traunsee), certain parts were stolen from her car, including doors, mirrors, and interior elements, which she considers an insured event under the contract. The plaintiff filed a claim for insurance compensation and submitted the documents required by the contract, including police materials, damage assessment from the official Bentley dealer in Munich, and other necessary documents. Additionally, the car was inspected by a representative of the insurance company, and on April 14, 2023, the plaintiff provided written explanations regarding the circumstances of the event.

Despite this, the insurance company did not fulfill its obligation to pay the insurance compensation and additionally demanded a repeated vehicle inspection, the plaintiff's personal appearance at the office in Kyiv to provide written explanations, and the submission of a notarized consent.

The plaintiff stated that she was unable to come to Kyiv.

The court of first instance fully satisfied the claim and awarded UAH 4,493,924.23 in insurance compensation. Meanwhile, the appellate court, after reviewing the case, upheld the insurer's obligation to pay but reduced the amount to UAH 4,471,454.61, taking into account the deductible.

Supreme Court Decision

The Supreme Court emphasized that, according to part one of Article 526 of the Civil Code of Ukraine, civil legislation contains general conditions for the fulfillment of obligations, which consist in their proper performance in accordance with the terms of the contract and the requirements of this Code. The court noted that this rule is universal and applies to both contractual and non-contractual obligations. Failure to comply with the conditions of performance leads to a breach of obligation.

A breach of obligation is its non-performance or performance with violation of the conditions defined by the content of the obligation (improper performance) (Article 610 of the Civil Code of Ukraine).

Reviewing the case in cassation, the Supreme Court agreed with the conclusions of the lower courts regarding the grounds for payment of insurance compensation, confirming that the plaintiff fulfilled the contractual obligations concerning notification of the insured event, interaction with the insurer, and provision of necessary documents. The court also noted that the insurer did not prove with proper and admissible evidence any breach of contract terms by the insured or obstruction to establishing the circumstances of the insured event.

At the same time, the Supreme Court thoroughly analyzed the issue of the amount of insurance compensation. The court stressed that the deductible is part of the losses which, according to the law and contract terms, is not subject to reimbursement by the insurer, and its amount is determined by the terms of the specific insurance contract. In this regard, it was established that the appellate court incorrectly determined the method of calculating the deductible, but the principle of its consideration was correct.

Furthermore, the Supreme Court took into account the contract provisions regarding the insurance premium, according to which the insurer has the right to reduce the payment amount by the sum of unpaid insurance premiums. Since part of the insurance premium was not paid by the plaintiff at the time of the insured event, this amount was also subject to deduction.

Therefore, the Supreme Court amended the decisions of the lower courts regarding the amount of insurance compensation, reducing it to UAH 4,408,774.23.

The Supreme Court concluded that the insurance company cannot refuse payment solely on the grounds of requiring additional documents or the personal appearance of the insured if the latter has already fulfilled the contractual obligations and provided sufficient evidence of the occurrence of the insured event.

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