Azamat Khagov’s comments in the article “Keys to KASKO”
24 October 2012
Supreme Court of Russia defended car owners against illegal limitations that the greater part of insurers had imposed on them: keys or documents left in a hijacked car now cannot be the reason for refusal to pay the benefit payment. Explanations of the supreme court instance are obligatory de-facto for almost everybody in Russian Justice. Presently even those car owners who lost the lawsuit with the insurer for the said reason can claim the payment.
The disputed clause is contained in the contracts (rules) of voluntary insurance imposed on the customers of the majority of the largest insurers (such as “Rosgosstrakh”, “RESO-Garantia”, “Ingosstrakh”, “MSK” and other). It looks as if the insurance police holders voluntarily admit that theft of a car together with documents (the vehicle registration certificate and/or the vehicle certificate (PTS), as well as the ignition key or the car door key (antitheft alarm key etc. ) is not an assured event. The insurer, in its turn, believes it is not obliged to pay the value of the theft car if its owner had lost the keys etc.
Weak point of a car
There is no official statistics of the incidents when insurers refuse to reimburse the value of the car hijacked because of the keys or documents left in it. According to the insurers’ opinions, such cases are about 5 – 7 percent from total number of hijacked vehicles insured under KASKO program.
The courts supported the claims for collection of damages brought in by the car owners in the great majority of such cases. More than fifty decisions that confirm illegality of inclusion of the norm that allows insurers refusing to pay in case of loss of keys and PTS by the car owner have been already taken against one and same insurer, “Ingosstrakh”. But neither this insurer nor other insurers that adopt the same policy haven’t made the corresponding correction in the contracts and have continued to refuse to pay till now. The lawyers of such companies have reckoned on the legal practice which hasn’t been absolutely unambiguous, and relied on the fact that most of the customers would not assert their rights in court.
Presidium of the Supreme Court of Russia put an end to the long-lasting dispute on October 10: the statement of nullity of the disputed clauses is published in the official bulletin of practice. The judges came to the conclusion that the insurers, being professional market participants and economically more powerful party to contracts, in fact, reduce their routine business risk connected with payment of the insurance benefit by making it dependent on the customer’s acts instead of the fact of occurrence of the insured event as an objective happening.
The conclusions of the supreme instance of court will allow ascertaining the rights of those insured who intend to claim corresponding collections from the insurers in future, as well as those insured whose cases are presently being considered in the first instance court: as Azamat Khagov, a lawyer of “Vertical” law firm explains explained, “Those customers who received no payment by the reason of loss of keys and documents are entitled to bring the claim in court within two years of the limitation period”. Stanislav Bobkov, a member of “Prime Advice Saint Petersburg” law firm, is of the same opinion: “Moreover, the legal acts that have already come into effect, can be reviewed on the basis of the new facts of the case, in particular, on the basis of definition (change) of practice of application of the legal norm in the Resolution by Presidium of the Supreme Court of the RF”, the attorney said. The application for review of the case shall be brought in court within three months, best before January 10.
The new way of thinking
Some insurers (for instance, “Renessans Strakhovanie”) state in the contracts that loss of keys/registration documents or leaving them in the hijacked car is a fact of gross negligence of the customer or breach of obligations undertaken by the customer that serves as grounds for refusal to pay the insurance benefit. However, the lawyers are sure that such clause is illegal: “Loss of keys or documents cannot serve as grounds for exemption of the insurer from the payment. According to the Civil Code of the RF, it is only possible if the insured event happened as a result of the car owner’s intention”, the lawyer Azamat Khagov said.
Some unfair insurers use to evade from payments even when the car owner complied with all requirements of safe keeping the keys and documents imposed by the insurers. For instance, “MSK” Company refused to compensate the value of hijacked Ford Focus to a citizen of Saint Petersburg on the grounds that the car owner hadn’t presented the keys and the antitheft alarm key to the insurer at once. She was unable to do it because the keys were attached to materials of the criminal case opened for the fact of theft in compliance with statute-established procedure, and so the keys were not in the applicant’s possession. The court found the company’s actions illegal.
The insurers comment upon the opinion of the Supreme Court of Russia in different ways. “Usually we don’t refuse to pay to the customers - natural persons who forgot PTS or duplicate keys in the car glove compartment,” as Alexander Kleyner, the Head of Legal Department of ASK Insurance Group said, “As far as the legal practice has been proving for a long time that such refusal would be cancelled in the court of general jurisdiction. The point of view of arbitration courts is opposite: they are convinced that the driver who works for a legal entity shall adhere to prescribed instructions and rules, in particular, shall not leave any unnecessary things in the car. Therefore, our position in relations with corporate customers may differ from our position with the private customers”, the lawyer said.
Representatives of “Renessans Strakhovanie” said that they used to pay the insurance benefit in case of theft of the car with documents and keys on condition that the customer presents necessary evidence from the law-enforcement authorities: “For example, if the hijacker acted in cooperation with the pickpocket who had stolen the keys,” Denis Chigarev, Director of Car Insurance Underwriting Department of the said insurance company said.
They don’t care a straw
The insurers whose contracts contain the disputed clause treat the opinion of the Supreme Court of Russia quite differently. So, press service of “Rosgosstrakh”, the company which loses about fifty cases only in Petersburg courts every month, flatly refused to comment upon the supreme court resolution. Evgeny Dubensky, the Head of Petersburg Branch of Allianze (the former ROSNO), who is also the leader of the Union of Insurers of Saint Petersburg and North-West Region, got to know about the resolution of the supreme court instance from a journalist of Voditel Peterburga and couldn’t express his appraisal of consequences of the said resolution for the market. Sergey Brovko, Marketing Director of a Branch of “RESO-Garantia” also wouldn’t explain illegal actions of the said company; he is that same person who had recently assured the journalists of considerable part of the relevant cases solved in favor of the insurers.
Nobody knows presently if the insurers change their policy. On the one hand, the private customers have been provided with consumer rights, and therefore entitled to bring claims without pay of the state fee, in courts at their place of residence. This innovation granted by the Supreme Court of Russia may cause the increase in number of disputes with insurers. Moreover, Rospotrebnadzor has been vested with the authority to impose the fine (up to RUR 20,000.00) on insurers for the mere fact of inclusion of the illegal norm in a contract. However, the lawyers doubt that such arrangements may change the illegal practice. “The only way to make the insurers keep from inclusion of such clause in a contract or rules of insurance, according to my deep conviction, is adoption of administrative fines that exceed the insurance benefit considerably”, Stanislav Bobkov said. Azamat Khagov also supports reinforcement of sanctions against the insurers which don’t observe their customers’ rights.
On the other hand, the increase of requirements will necessarily result in tariff increase; according to Denis Chigarev’s opinion, the increase can amount up to 10 percent. Even now all the market members assure that KASKO is on the verge of unprofitability.
Of course, the insurers’ reasons are easy to understand: they cannot be sure in some cases that theft of a car with keys and documents hadn’t been contrived by the customer. Absence of the disputed clause frees the customers from any responsibility for safe keeping the keys etc., therefore, the risks increase inevitably. For instance, a customer of “Rosgosstrakh” alleged that he had dropped into water of the Neva River from the parapet by accident a small bag with keys and documents for Mitsubishi Lancer (one of the most popular cars with hijackers); the car disappeared very soon after that, too. The matter is if the insurer has right to doubt reliability of such a tricky story, or shall it at least divide the responsibility with the awkward car owner?
The insurers’ lawyers also remind that theft or hijacking shall be treated differently from robbery or plunder, when violence or threat is applied to the driver (in such cases presence of the keys has no importance for solution of the matter of payment).