If your car insurer refuses to pay or reduces the payout, the dispute is essentially about how the contract is interpreted and what can be proved. Under § 6 of the Insurance Contract Act (VersVG), the insurer can be released from paying if a policy obligation has been breached – but only in cases of intent or gross negligence. Where the negligence was gross, you are entitled to prove that the breach had no effect on the loss (§ 6(3) VersVG). In many cases, the burden of proof lies with the insurer. Claims become time-barred after three years (§ 12 VersVG). Notifying the claim to the insurer suspends the limitation period until you receive its reasoned written decision. Many denials of cover do not stand up to legal scrutiny.
When your insurer won’t pay
You have paid your premium faithfully for years – and when you make a claim, you receive a letter denying it instead of a payment. Your comprehensive insurer, which covers your own vehicle, cites ‘gross negligence’. Your motor vehicle liability insurer cuts the payout because of an alleged breach of a ‘policy obligation’. Or the other party’s insurer settles only a fraction of your claim. Letters like this sound final – but often they are not.
At its core, an insurance dispute is a legal argument about interpretation and evidence. What do the contract and the general policy conditions say? Who has to prove what? Was your conduct really grossly negligent – and would it have had any effect on the loss at all? This page gives you a clear overview of Austrian insurance contract law as it applies to cars, and shows when it is worth challenging the insurer’s decision in writing. At our law firm in Vienna, we review letters denying or reducing claims, draft the written challenge and, if necessary, pursue justified claims in court.
Policy obligations & the insurer’s release from liability
The Insurance Contract Act (VersVG) requires you to comply with what are known as policy obligations – rules of conduct that apply before and after a loss. They include the duty to notify the claim, which means reporting the loss in good time, and the duty to help establish the facts of the claim. This means cooperating in clarifying what happened, concealing nothing and not obstructing the evidence. If you breach an agreed policy obligation, § 6 VersVG can release the insurer from its obligation to pay. In extreme cases, the insurer does not have to pay anything at all.
However, important limits soften this harsh ‘all or nothing’ rule, and in practice they are often overlooked:
- The degree of fault matters: Breaches caused by minor negligence usually have no consequences. Only intent or gross negligence leads to a full release from the obligation to pay.
- Proof of lack of causation: If you breached a policy obligation through gross negligence, you may prove that the breach had no effect either on the occurrence of the loss or on the extent of the insurer’s obligation to pay (§ 6(3) VersVG). If you succeed, your claim remains intact.
- Burden of proof on the insurer: If the insurer relies on a breach of the duty to help establish the facts, it must set out and prove both a specific suspicion and the fact that evidence has become ‘unusable’ – a general assertion is not enough.
These limits are exactly where a lawyer’s review comes in: many denials do not survive the question ‘Was it really grossly negligent – and did it actually cause the loss?’
Comprehensive vs liability insurance – who is in dispute with whom?
A car usually involves several different insurance policies. Who you are actually in dispute with depends on which one is involved:
| Insurance | Who pays – and what the dispute is about |
|---|---|
| Your own comprehensive insurance – fully comprehensive or partial cover | Covers damage to your own vehicle. Typical dispute: the payout is reduced or refused because of gross negligence or a breached policy obligation. Here, your own insurer is your opponent. |
| Your own motor vehicle liability insurance | Covers damage you cause to others. Disputes arise, for example, when the insurer brings a recourse claim against you – demanding repayment – after drink-driving or a hit-and-run, or over breached policy obligations. |
| The other party’s liability insurance | Settles your claim if someone else was at fault for the accident. Our related page ‘Road accidents & damages’ covers this situation. |
Insurance disputes in the strict sense are usually about the first case: your own comprehensive insurer refuses to pay or reduces the payout – and you suddenly find yourself facing your own contractual partner as an opponent.
Gross negligence in comprehensive insurance – the most common sticking point
Your comprehensive insurer may reduce or refuse the payout if you caused the loss through gross negligence. But ‘gross negligence’ is a legal concept, not a blank cheque for the insurer: the insurer must give reasons for, and prove, the serious lack of care and the extent of any proportional reduction of the payout. Typical indicators include significantly excessive speed, serious distraction or drink-driving. If alcohol made you unfit to drive, the payout can fall as low as zero, depending on how serious the case is (the exact blood alcohol and reduction thresholds depend on case law and on the individual case). You can almost always question whether the insurer has reduced the payout correctly in your case.
Common reasons for denial & how to challenge them
| Reason for denial or reduction | How to challenge it |
|---|---|
| ‘Gross negligence’ (comprehensive insurance) | Was the breach really gross? Has the insurer given adequate reasons for the size of the proportional reduction? The burden of proof lies with the insurer. |
| Breach of the duty to notify or to help establish the facts | Was the policy obligation validly agreed in the first place? Proof of lack of causation under § 6(3) VersVG: did the breach affect the loss or the extent of the payout? |
| False or incomplete information | Intent, or only minor negligence? Minor negligence usually has no consequences. |
| Disputed amount of the loss | Obtain your own expert report. If the policy conditions provide for an expert determination procedure, use it (depends on the contract). |
| ‘Claim time-barred’ | Check how the limitation period runs (see below): notifying the claim to the insurer suspends the limitation period until you receive its reasoned written decision. |
The first step is always a reasoned written challenge to the insurer’s decision, with a deadline for its response. If that does not work, out-of-court conciliation is available and, as a last resort, a claim in court.
Limitation: how long you have
Under § 12 VersVG, claims under an insurance contract generally become time-barred after three years. Two special features are crucial:
- Suspension by notifying the claim: Once you have notified your claim to the insurer, the limitation period is suspended until you receive the insurer’s reasoned written decision. So the insurer cannot simply let the clock run by staying silent.
- One-year time limit for filing a claim (§ 12(3) VersVG): If the insurer refuses cover and informs you of the legal consequences, you currently still have to file a claim within one year. The Constitutional Court has struck down this rule as unconstitutional, but the repeal only takes effect at the end of 31 May 2027. The exact transitional rules and the current legal position need to be checked in each individual case.
Practical advice: have the deadlines checked early, and do not wait until shortly before they expire to respond to a letter denying your claim. A missed deadline can make a justified claim worthless.
The process: written challenge, expert report, court action
- Reviewing the letter: We analyse the letter denying or reducing your claim, the contract and the underlying general policy conditions (e.g. AKKB for comprehensive cover, AKHB for motor liability), and assess whether the insurer’s arguments hold up.
- Reasoned written challenge: We draft the written challenge with clear legal reasoning and a deadline for a response – the insurer often gives ground at this stage.
- Evidence & expert reports: If the amount of the loss or the question of fault is disputed, we obtain an expert report. If the contract provides for an expert determination procedure, we use that route (depends on the contract).
- Out-of-court settlement: Where it makes sense, we negotiate a solution directly with the insurer – this is often quicker and cheaper than court proceedings.
- Court action: If no agreement is reached, we file a claim with the court that has jurisdiction. The value in dispute determines whether the district court or the regional court hears the case. The exact threshold for the value in dispute must be checked in each case.
When the insurer does not pay: cases in the media
Two cases from our practice, reported in the Kronen Zeitung, show that persistence with insurers can pay off:
‘Attempted murder with a car: victim receives €400,000’
In 2019, a man was deliberately run down with a car and seriously injured. The offender’s liability insurer refused to pay because intentional acts are not covered. We turned to the insurers’ association and secured more than €400,000 for therapy and for adapting his house for disabled access.
Read the report on krone.at →‘Lorry ran over young woman: almost €100,000 in damages for pain and suffering’
In 2018, a Viennese woman was run over by a lorry and seriously injured; at first the insurer was unwilling to pay. We won compensation of just under €100,000 for her.
View original clipping (PDF) →How we help
Our law firm, Teamanwälte, is based in Vienna and led by Mag. Johannes Bügler. We know how the major insurers behave and how the local courts work. We take letters denying or reducing claims apart, examine policy obligations, the degree of fault and causation – and tell you honestly whether a written challenge and, if necessary, court action are worthwhile. If you have legal expenses insurance, it often covers proceedings like these. We clarify cover with your legal expenses insurer in advance.
If you are unsure whether your insurer’s denial is lawful, tell us about your situation. We will review the letter and give you an open assessment of your chances – without pressure.
Teamanwälte – Mag. Johannes Bügler · Baumgartenstraße 82, 1140 Vienna · Phone +43 1 419 13 18 · office@teamanwaelte.at
You will find more on the wider topic on our page Road accidents & damages (the other party’s liability insurer). If your problem is a defective car rather than your insurance, see Warranty when buying a car.
Note: This article provides general information only and does not replace individual legal advice. The time limits, statutory provisions and thresholds mentioned are for general guidance only; the specific assessment depends on the individual case. We give no guarantee of success.