Refusal of Insurance Benefit Due to Untruthfully Given/Provided Data

The Supreme Court of the Czech Republic dealt in its decision as of 9.9.2014, reference number 23 Cdo 1735/2014, with a following question: is an insurer entitled to refuse the insurance benefit if the insured had given the insurer within the negotiation of the insurance contract untruthful data regarding the price and the damage of a car, which was subsequently stolen?

Given these circumstances, the insurer refused the insurance benefit pursuant to the provision of Section 24 Paragraph 1 Letter b) of the Act No. 37/2004 Coll., Insurance Contract Act (refusal of insurance benefit due to untruthfully given data concerning the extent of the loss).

The Supreme Court stated that untruthfully given data did not regard to the extent of the loss; they were provided in connection with the negotiation of the insurance contract. The Supreme Court has therefore come to the conclusion that the insurer was not entitled to refuse the insurance benefit according to the provision of Section 24 Paragraph 1 Letter b) of the Insurance Contract Act. According to the legal opinion of the Supreme Court, in such cases is the insurer entitled only to withdraw from an insurance contract according to the provision of Section 23 Paragraph 1 of the Insurance Contract Act; the insurer must exercise this right within two months from the day when he found out that the insured had provided him with untruthful data.