Policyholder Obligations After an Insured Event: Are Baltic Insurance Laws Too Insurer-Friendly Compared to the Principles of European Insurance Contract Law?

This article explores the differences between the Estonian Law of Obligations Act, the Latvian Insurance Contract Law and Lithuanian rules contained in the Civil Code and Insurance Law in comparison with the Principles of European Insurance Contract Law with regards to the policyholder's obligations after insured event. The three key obligations after insured event, i.e., (i) the obligation to reduce damage, (ii) the obligation to report an insured event, and (iii) the obligation to cooperate, play a major role in the performance obligation of the insurer. It is precisely the proper performance of those obligations that determines how quickly the policyholder receives insurance indemnity, should there be an insured event. Breach of those obligations may in certain cases result in a refusal to pay insurance indemnity. Compared with national laws of the Baltic States, the relevant regulation provided in the PEICL is more favourable and consumer-friendly for policyholders.