Part 4


Chapter 23


Division 1

General Provisions 

  • 422. Definition of insurance contract

(1) Pursuant to an insurance contract, a person (insurer) undertakes, upon the occurrence of an insured event, to compensate for damage caused by the insured event or to pay the agreed amount of money as a lump sum or in instalments, or to perform the contract as otherwise agreed (insurer’s performance obligation). The other person (policyholder) undertakes to pay insurance premiums to the insurer.

(2) [Repealed – RT I, 07.07.2015, 1 – entry into force 01.01.2016]

  • 4221. Obligatory insurance and compulsory insurance

(1) In the cases provided by law, a policyholder is required to enter into an insurance contract (obligatory insurance). This Act applies to obligatory insurance contracts with the specifications arising from the Act which establishes obligatory insurance.

(2) In the cases provided by law, a policyholder is required to pay a premium and the obligation to compensate rests with a legal person in public law or a legal person in private law performing public duties (compulsory insurance). This Act applies to compulsory insurance in the case it is prescribed by the Act which establishes compulsory insurance.

[RT I, 07.07.2015, 1 – entry into force 01.01.2016]

  • 423. Insured event and insured risk

(1) An insured event is an incident previously agreed upon, upon the occurrence of which the insurer shall fulfil the performance obligation arising from the contract.

(2) Insured risk is the hazard against which insurance is provided.

  • 424. Insured person and object of insurance

(1) An insured person is the policyholder or a third party, whether identified by name or not, whose insured risk is insured. It is presumed that the insured risk against which insurance is provided relates to the policyholder.

(2) An object of insurance is an object the insured risk of which is insured.

  • 425. Beneficiary

(1) A beneficiary is a person who, upon the occurrence of an insured event, is entitled to the insurance indemnity, agreed amount of money or performance by the insurer of any other obligation provided in the contract.

(2) After a policyholder dies, the successors of the policyholder shall not replace the beneficiary.

  • 426. Sum insured

(1) In indemnity insurance, the insurer shall compensate for damage caused upon the occurrence of the insured event only to the extent of the agreed amount of money which is the maximum amount payable by the insurer (sum insured). This shall not affect the provisions of § 477 of this Act.

(2) The sum insured may be expressed in a manner other than in the form of the maximum amount payable.

  • 427. Limitations on freedom of contract

(1) Any agreement which derogates from the provisions of §§ 428, 432, 433 and 435, subsections 436 (2) and 438 (3), § 439, subsections 441 (2) and (3), § 442, subsection 445 (3), §§ 449 and 450, subsections 452 (2) and 454 (2), §§ 457 to 459, 461, 462, 468 to 472, 474, 475, 487 and 491, subsection 492 (3), and §§ 515, 519 to 531, 535 to 537, 542 to 547 and 557 to 567 of this Act to the detriment of the policyholder is void.

(2) The provisions of subsection (1) of this section shall not apply to:

1) reinsurance contracts;

2) railway rolling stock, aircraft and ship insurance contracts;

3) insurance contracts with respect to the carriage of goods;

4) aircraft and ship liability insurance contracts;

5) credit and suretyship insurance contracts if insured risks arising from business or professional activities are being insured.

(3) The provisions of subsection (1) of this section also do not apply to land vehicle, fire and natural forces or financial loss insurance contracts or to general liability insurance contracts, if the policyholder satisfies at least two of the following conditions:

1) the balance sheet total exceeds an amount which is equivalent to 6,200,000 euros;

2) the net turnover of the financial year exceeds an amount which is equivalent to 12,800,000 euros;

3) the average number of employees during the financial year is not less than 250.

(4) In the case of companies belonging to the same consolidation group within the meaning of the Accounting Act, the figures provided in subsection (3) of this section shall be calculated on the basis of the company data in the consolidated reports.

[RT I 2005, 39, 308 – entry into force 01.01.2006]