Blog
27 February 2020
When can an insurer exceed the 30-day limit for the payment of compensation?

Pursuant to Article 14(1) and (2) of the Act on obligatory insurance, Insurance Guarantee Fund and Polish Motor Insurers’ Bureau of 22 May 2003, an insurance undertaking pays compensation within 30 days from the submission of a claim notice by a victim or an authorised party or, should the clarification of the circumstances necessary for the establishment of insurance undertaking’ liability or the level of compensation proved to be impossible in that period, compensation is paid within 14 days from the day on which the clarification of the circumstances with due diligence proved possible, but not later than within 90 days from the submission of the claim notice.

The Act provides for one exception from the above shown rules. The maximum period of 90 days can be exceeded only when the establishment of insurance undertaking’s liability or quantification of compensation is subject to pending criminal or civil proceedings. However, since the insurance undertaking is obliged to conduct explanatory proceedings on its own, the application of the provision is possible only in special cases.

The Supreme Court, in its judgment of 19 September 2002 (case ref. V CKN 1134/00), emphasises that the obligation to pay compensation by an insurance undertaking under motor liability insurance of a vehicle keeper who caused damage arises not when a criminal judgment establishing the blame of a person responsible for the accident becomes absolute, but generally when the insurance undertaking establishes (as early as practicable) the circumstances of the accident. This is because the insurance undertaking has a duty to establish the conditions of its liability, i.e. to actively and individually clarify accident’s circumstances and compensation level, whenever it is notified of an accident.

Moreover, it must be highlighted that the quoted Article 14(2) of the Act provides that the maximum period of 90 days can be exceeded only when the establishment of insurance undertaking’s liability or quantification of compensation is subject to pending criminal or civil proceedings. Thus, the provision does not relate to any proceedings pending in misdemeanour cases.

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