An insurer’s refusal to pay, or its decision to offer an amount substantially below the loss claimed, does not necessarily bring the matter to an end.

The decision may be reviewed against the insurance policy, the applicable general terms, Bulgarian insurance law and the evidence relating to the insured event and the resulting damage.

Request a written and reasoned decision

Do not rely exclusively on a verbal explanation from an employee, broker or claims handler. Request the insurer’s formal position and the factual and legal grounds on which it is based.

Once all evidence required to establish the basis and amount of the claim has been submitted, the insurer will generally be required to issue its decision within 15 business days by paying the benefit or issuing a reasoned refusal. The exact and maximum time limits may depend on the product and claim.

When the dispute concerns the amount assessed, the policyholder or claimant may request a written factual and legal explanation. Bulgarian insurance legislation provides for a seven-day period for that explanation.

Common grounds used to deny insurance claims

• The event is not covered or a contractual exclusion applies.
• The claimed damage was not caused by the reported event.
• The insured allegedly failed to comply with an obligation or reported late.
• Required documents were not provided.
• The actual loss is said to be lower.
• A deductible, depreciation or underinsurance clause is applied.

Each reason must be examined in the context of the policy and facts. Merely referring to an exclusion or breach does not establish that the refusal is justified.

What to examine when a claim has been underpaid

• Which items of damage were included and whether any were omitted.
• The prices used for parts, materials and labour.
• Whether a deductible or depreciation was applied and on what basis.
• Whether the valuation method complies with the policy and the law.
• Whether an independent expert assessment is necessary.

For personal injury claims, medical evidence, treatment costs, the recovery period and the effect of the injuries on everyday life may all be relevant.

Be careful before signing a settlement

Before signing a full-and-final settlement or a declaration that all claims have been resolved, establish whether the document prevents you from seeking additional compensation later. The wording and the parties’ statements must be reviewed.

Documents that should be collected

• The insurance policy and applicable terms.
• The claim notification, damage reports and photographs.
• Expert assessments and correspondence with the insurer.
• Invoices, repair quotations and medical records.
• The written refusal or assessment.

Keep registration numbers and evidence of the date on which every document was submitted.

Available courses of action

1. A written objection to the insurer.
2. A request for a detailed factual and legal explanation.
3. Additional evidence or an independent expert report.
4. Negotiations for an out-of-court settlement.
5. A complaint to the Bulgarian Financial Supervision Commission.
6. Alternative dispute resolution, where applicable.
7. Court proceedings before the competent Bulgarian court.

The Financial Supervision Commission may conduct a regulatory review, but it does not replace the court in determining and awarding a disputed payment.

Do not postpone the legal review

Different limitation periods may apply. The date of the insured event, submission of the claim and the insurer’s decision may all be relevant.

Zdravkov Law Office advises clients in insurance disputes, negotiations and court proceedings. Further information is available on our home page.

This article is intended for general information and does not constitute legal advice for a particular matter.