Entitled to insurance benefits? Pay attention to the statute of limitations!
A monetary claim lapses after five years. Recently, this came up in my practice in a case where a third party paid litigation costs for another and only claimed payment of that amount after more than five years had passed. The court ruled that the claim was time-barred and rejected the claim for (re)payment of the legal costs advanced. The statute of limitations for a claim for payment of a sum of money under an insurance policy entered into differs from the general rule.
When does the right to an insurance payment expire?
If you are entitled to the payment of an insurance benefit, the claim does not lapse after five years but already after three years (Article 7:942 BW). An important difference is that this period only starts from the moment the person entitled to payment is (has become) aware that the claim is due. The requirement is that the person entitled to payment is actually in a position to institute legal proceedings.
Rights and obligations in the event of an insurance payment
A certain investigation may be required of the person entitled to benefits in order to establish the legal claim against the insurer. In other words, you must investigate whether you are entitled to a benefit. If you fail to make that investigation, your right to a benefit may be time-barred. This is therefore also the case if you did not know (anymore) that you were entitled to a benefit. The determining factor is what you could have known if you had investigated.
If a situation arises that could entitle you to a benefit from an insurer, you are therefore required to investigate whether you are insured and entitled to a benefit. This is different only if special circumstances meant you did not have to be aware of the coverage. That bar is high. There are not likely to be such special circumstances.
Insurance benefit statute of limitations
If you only find out after more than three years that you are entitled to a benefit from the insurer, your claim is in principle time-barred. With a benefit that provides for payment in monthly installments, the limitation period of each installment should be assessed separately. It is therefore quite possible that the benefits to which you were first entitled are time-barred, while you are still entitled to payment of monthly installments over the last three years and into the future. This occurs, for example, with insurance policies that provide disability and/or unemployment coverage.
Therefore, check your insurance policies regularly. Not only whether you are adequately (and not double) insured, but also whether you are entitled to benefits under any insurance policies you have taken out.
Any questions?
Would you like more information or do you have any questions? Please contact Olivier van Hardenbroek.
