Legal Expenses Insurance
- 526. Obligations of insurer
(1) In legal expenses insurance, the insurer shall, to the extent prescribed by the contract, protect the legal interests of the policyholder upon the occurrence of an insured event and cover the costs of legal assistance, procedure expenses and other similar expenses incurred as a result thereof. It is presumed that the insurance covers legal assistance both in court and in administrative proceedings and outside administrative agencies.
(2) The provisions of this Division concerning insurers shall also apply to insured persons who are not policyholders.
- 527. Information in insurance contract
If insured risks in the field of legal expenses insurance are insured together with other insured risks, the scope of the insurance cover in legal expenses insurance and the insurance premiums payable therefor shall be indicated separately in the insurance contract. If the insurer entrusts an independent loss adjuster with the task of managing the performance of obligations arising from an insurance contract, this shall also be indicated in the contract.
- 528. Choice of advocate
(1) The policyholder may choose an advocate to represent the policyholder and to protect the interests of the policyholder in judicial or administrative proceedings or to protect the legal interests of the policyholder in any other manner, including in the policyholder’s relationship with the insurer.
(2) If the policyholder applies to the insurer for the appointment of an advocate, the insurer shall expressly inform the policyholder of the right specified in subsection (1) of this section.
(3) Persons other than advocates may be appointed to represent the policyholder in judicial or administrative proceedings or to protect the legal interests of the policyholder in any other manner only by agreement with the insurer.
- 529. Provision of expert assessment
(1) An insurance contract shall prescribe the provision of expert assessment which complies with the conditions provided for in § 490 of this Act to assess the prospects of legal assistance being effective or being in bad faith and which the policyholder may use if the insurer refuses to perform the obligation because, in the insurer’s opinion, the prospects of legal assistance being effective are not sufficient or if legal assistance would be in bad faith.
(2) If the insurer refuses to perform its obligation, the insurer shall inform the policyholder of the right to obtain expert assessment.
(3) If the provisions of subsection (1) or (2) of this section are not complied with, the policyholder’s need for legal assistance in this particular case shall be deemed to have been recognised by the insurer.
(4) The limitation period of the policyholder’s claim shall be suspended while the expert assessment provided for in subsection (1) of this section is provided, although the period shall not be suspended for longer than three months.
- 530. Insurer’s obligation to inform policyholder of insurance cover
(1) If a policyholder submits a claim arising from subsection 526 (1) of this Act to an insurer, the insurer shall inform the policyholder within two weeks and in a format which can be reproduced in writing of whether the insurer will perform the obligation arising from the contract. Refusal to perform the obligation shall be justified and the facts or the provisions of law or of the contract which are the basis for refusal shall be indicated.
(2) If the policyholder has not forwarded all the information necessary to verify the claim arising from subsection 526 (1) of this Act to the insurer, the insurer may demand the submission of additional documents during the term provided for in subsection (1) of this section. In such case, the term provided for in subsection (1) of this section shall begin to run as of the submission of documents.
(3) If the insurer fails to prove that the insurer performed the obligation provided for in subsection (1) of this section, the insurer shall compensate for all costs for legal assistance which are covered by the insurance and which have been incurred during the period of time from the expiry of the term specified in subsection (1) of this section to communication of the insurer’s position to the policyholder.
[RT I 2002, 53, 336 – entry into force 01.07.2002]
- 531. Transfer of insurance contract
If the costs for legal assistance relating to the enterprise of a policyholder are insured and the enterprise is transferred or use thereof is granted to another person, the policyholder’s rights and obligations arising from the insurance contract transfer to the transferee or the person to whom use thereof is granted. The provisions of §§ 494 to 498 of this Act apply accordingly.