Rest assured by jolinmilioncherie


									                                                        5a / 2012

The most important
information about:
Motor vehicle liability
Motor Vehicle
Comprehensive Insurance
Casualty insurance
Personal liability insurance
Supplementary health
Household and Home
Ownership Insurance
Life insurance
Travel insurance

             Rest assured

                                  In cooperation with

Dear readers,

Dr. Louis Norman-                                Franz Floss
Audenhove Secretary                              Managing Director of
General of the                                   the Association for
Austrian Insurance                               Consumer Information
Association VVO                                  (VKI)

Anyone who wants to protect himself from harm can either plead          What is insurance all about?
for divine assistance or seek to limit the financial damage by taking   Insurance is the basic principle of collective
                                                                        underwriting. Many people pay a certain
out insurance. In both cases, it remains uncertain whether or not a
                                                                        amount of money (= insurance premium)
damage event will occur. One thing is certain, however: insurance       into the pot of money of the insurer that
cannot prevent a disaster but it can minimize the potential             then access this money pot in order to
financial consequences.                                                 receive compensatory damages in the case
                                                                        of an insurance event. Because the insured
The Consumers' Association also helps to make the insurance             event will occur statistically only with a
market more transparent for consumers, providing everything             few of those insured, there is enough
from analyses, to test reports and general reports. Well-informed       money in the pot for the amount to be
                                                                        paid out for individual insurance claims.
customers are better able to select the exact insurance to fit their
respective needs.                                                       Which insurance for whom?
                                                                        First there are the existential risks. For a
This KONSUMENT special edition, compiled in cooperation with            family, this could be the death or disability
the Austrian Insurance Association VVO, hopes to inform you             of the breadwinner, a child having an
about what "insurance" actually means, to describe the most             accident resulting in severe physical long-
important fields in a fact sheet and to draw attention to their         term damage; for house or apartment
                                                                        owners, this may concern a full-fledged
respective features. Questions such as: "Which risks can I insure
                                                                        fire that renders them homeless. Think
myself against? What kinds of risks are covered in general? What
                                                                        about which particular situations would
to do in an emergency?" are all being covered here.                     present a threat to your existence.

A particular concern of this edition is to explain in simple language   Who is acting as broker for
the sometimes complex issues of insurance. This includes a              the insurance policies?
detailed glossary that explains the most common technical terms         From the point of view of the selection
in insurance contracts in order to make them generally                  options, and also in terms of liability, it
                                                                        makes a difference whether you sign the
understood. Also, this glossary will ultimately contribute to
                                                                        insurance contract through the insurance
preventing misunderstandings between customers and insurers in          agent, at the bank counter, with an
the first place.                                                        independent insurance agent or

2 KONSUMENT 5a/2012
                                                                               Getting the right insurance

               The most important information in brief

with the field employees. An agent
is tied to one (or more) insurance
companies and provides only their
products.      An       independent
insurance broker is obligated by law
to pick out the best insurance
product for you from among the
range of products offered by all its
suppliers.                              complete information in the            police in case of burglary, theft,
Policy check                            insurance application or that the      fire. List all important stolen or
It pays to compare, not only in the     insurer is informed of a change in     damaged items, complete with
beginning, but also over and over       risk during the contract period. In    information about their respective
again, even with existing insurance     order for the insurer to pay in the    values. Report the damage to the
policies. First, you should consider    case of damage, there is a need -      insurer immediately. Note: The
whether there is any unnecessary        depending on the respective            insurer reserves the right to inspect
multiple or double insurance, then,     insurance field - to act with due      the damage (thus, please do NOT
whether desired individual products     diligence on the part of the insured   dispose of anything immediately!).
are cheap enough. In the area of        party (e.g. when leaving the house,    Before the clean-up, you need to
life and health insurance, a change     you need to lock the doors). In the    take photos of the damage in any
does not get you anywhere in most       event of a claim, you must ensure      case.
cases, or might even have a             that the damage is minimized (e.g.,    The written notification of a claim
negative impact, while in other         turn off mains water stopcock, call    should reflect in detail what
areas, such as car insurance or         the fire department etc.).             happened exactly when, where and
homeowners'        and    household                                            how. Avoid vague phrases such as
                                        What to do in the event of a           "Compensate me properly," you
insurance, you should check at least
                                        claim?                                 need to cite specific amounts. Also,
every few years whether the
                                        You need to undertake all              you can claim for your own work
current insurance policy is still the
                                        necessary steps to limit the damage    (e.g. clearing, cleaning, repairs) at
best one for you, and this should
                                        (for example, in the case of           regular market rates.
be done by comparing what else is
                                        burglary, have any stolen credit       In the event that your claim is
on offer.
                                        cards cancelled and your savings       rejected       and       this      is
What are the obligations?               accounts blocked, replace door         incomprehensible to you, it is best
Obligations   refer    to    the        lock; turn off the mains tap in the    to ask for the reasons why in
commitments of the insured party.       case of water damage, call the fire    writing. Check if the rejection of
These include, for example, the         brigade in the case of fire). Take     your claim is consistent with the
need to provide honest and              pictures of the damage. Inform the     insurance contract terms.

                                                                                                   KONSUMENT 5a/2012 3
                                                           Motor vehicle insurance: liability insurance

                                                                                 Required by law

   Motor vehicle liability insurance
   Taking out liability insurance is      beyond this sum out of your own        transported
   required by law in order to get a      pocket.
   vehicle license plate and put the                                             Premium rates and
   vehicle on the road. Motor vehicle     What is included, what is              bonus/malus system
   liability insurance is a compulsory    excluded?                              With most cars and station
   insurance because it protects both     All legitimate claims for damages      wagons, the premium is based on
   wrongdoer and victim, and              suffered by third parties caused by    the engine performance, and in
   prevents the risk that a traffic       your car are covered – but only up     single-track vehicles on the cubic
   accident could lead to financial       to the amount of the agreed sum        capacity and/or on the number of
   ruin, or that an innocent victim,      insured. Your insurance will also      seats. In addition, most insurers
   because of insolvency of the           defend you against unjustified         will have the premium calculated
   wrongdoer, does not receive any        claims made against you. Insured       according to the number of
   compensation. It covers damages        parties are as follows:                claims. The bonus / malus system
   that the insured person causes to       Policyholder, owners and keepers      ranges from stage 00 (for some
   others with his vehicle and / or        of the vehicle and any authorized     insurers with substages as well) up
   pays the costs of defense against       driver, as well as attendants and     to stage 17. If you register a
   unjustified claims. At the same         passengers.                           vehicle for the first time, you are
   time it ensures the victim's                                                  usually classified as stage 09 and
   compensatory       damages.     The    The following is a list of what        must pay 100 percent of the rate
   motor vehicle liability insurance is   is not insured:                        premium. Each accident-free year
   valid all over Europe (in the           Damage to the insured vehicle        leads a stage up toward bonus,
   geographical sense).                       itself (this can be covered by a   each damage event three stages
   The minimum sum insured for                comprehensive insurance            down towards malus. For the
   passenger cars is currently seven          policy)                            annual reclassification, there is a
   million euros. It is possible to        other property damage                period of observation, which
   increase it for a small additional         suffered by the owner or           ranges from 1 October of each
   premium, as otherwise you would            keeper of the insured vehicle      year to 30 September of the
   have to pay any claims going            Damage to the cargo                  following     year.     The   stage

4 KONSUMENT 5a/2012
conversion is then effective for the     Following a damage claim, the            premium is payable annually in
next principal maturity in the           contract may be terminated for           advance. If you are paying your
following calendar year. When            any reason without notice. If the        premiums on a semi-annual,
changing insurance providers, the        liability insured vehicle is sold, the   quarterly or monthly basis, the
current bonus-malus classification       insurance        is     automatically    insurer is deferring, so to speak,
is maintained.                           transferred over to the buyer, who       the premium for you and may
                                         may terminate the insurance              hence charge an additional
Cancellation                             contract within a period of one          installment fee. Also, motor
If the policy has been taken out         month. Note: The insurer, too, is        vehicle insurance tax is higher for
for at least a year, it will be          entitled to terminate the contract       installment payment (6% for
extended automatically by another        in compliance with applicable            semiannual, 8% for quarterly and
year if it is not cancelled in           notice periods.                          10% for monthly payment). There
writing, with a notice period of                                                  are potential savings for you in
one month prior to the expiration        Installment surcharge                    this!
date (by registered letter is best).     The motor vehicle insurance

Motor vehicle insurance: Fully Comprehensive
For your own damage
Damage to the vehicle of the             cause of damage - will also be           original state upon sale of the
insured party is covered by what is      covered.                                 vehicle in damaged condition
called comprehensive (or fully                                                    + In the case of total loss, the
comprehensive)             insurance     Collision (fully comprehensive           replacement cost minus the
coverage. It is a voluntary              insurance)                               residual value the damaged
insurance and pays for the               This, in addition to the partial         vehicle (car wreck)
destruction of, damage to, or loss       coverage provided by partially
of the vehicle. While the motor          comprehensive insurance, will also       The following is excluded from
vehicle liability insurance covers       cover any damage caused in an            coverage:
damages sustained by third               accident regardless of fault or bad      - Brake, operating and pure
parties,        voluntary        fully   faith of other people. For a new         breakage damage such as
comprehensive insurance coverage         car, it is usually recommended to        mechanical failure, wear and tear
benefits the vehicle owners              take out the more expensive fully        damage, etc
themselves, because it covers            comprehensive            insurance,      - Car rental costs
damages to their own vehicle.            because, as its name says, it            - Damage caused by willful intent
In the case of fully comprehensive       protects in a more comprehensive         or grossly negligent conduct
insurance, the specific model of         manner.                                  - Reduction in value
the vehicle is insured, complete         Before taking out any kind of
with the special equipment as            insurance, you should in any case        Premium amount
clearly identified in the application    insist on having explained to you        This depends on the product
form. The services provided by           exactly what is covered in the           variant and the agreed deductible.
comprehensive insurance coverage         event of damage, and what the            Deductible (percentage or fixed
depend on the selected product           deductibles (excesses) are.              amount) is the part that needs to
variant. We actually distinguish                                                  be paid by the customer himself.
between elementary (partial) and         What is included, what is
collision    (full)   comprehensive      excluded?                                In a nutshell
insurance.                               The following is included in the         Motor vehicle liability insurance is
                                         coverage:                                mandatory;          comprehensive
Elementary (partial)                     + Necessary repair costs                 insurance     is     a     voluntary
comprehensive coverage                   + Required salvage and towing            supplementary insurance. Because
This covers damage related to            costs up to the next workshop            of the different offers and many
theft, fire, wildlife accidents,         + Repatriation up to a certain           different     variants,     it     is
avalanches, storms, floods, hail         percentage of the replacement            recommended to compare several
and snow. By separate agreement,         value in case of theft or robbery of     offers prior to taking out the
breaking of the front, side and          the vehicle                              insurance.
rear windows - regardless of the         + Estimated cost of recovery of
                                                                                                      KONSUMENT 5a/2012 5
                                                                                  Personal accident insurance

                                 Protection against existential threats
Each year, in Austria, there are          + when on vacation                      include       treatment       costs,
about 830,000 accidents (source:          Financial   loss    often   results,    repatriation and recovery costs.
KFV), and nearly 9,000 result in          however, not only when the
disability. The statutory social          accident has led to permanent           Treatment costs
security insurance, however, covers       health damage or death. You can         Actual treatment costs will be
only the consequences of an               also cover yourself for loss of         reimbursed up to the sum insured.
accident at work, and this although       revenue caused by absenteeism           This includes the cost of
the most serious accidents mostly         due to accidents, hospital stays,       transporting the injured individual,
occur during leisure and sports           costs for convalescence and             costs for the initial purchase of
activities. Of course, social security    recovery costs following an             artificial limbs and other required
insurance will cover the necessary        accident. Several options are being     first-time purchases.
primary care in these cases, but you      offered by accident insurance, for      But beware: This does not cover
can only insure yourself against the      example,         accident      cost     costs for rehab trips and stays,
financial consequences by taking          reimbursement (medical, rescue          repair      and   replacement    of
out personal accident insurance.          and repatriation costs).                dentures, artificial limbs or other
Personal accident insurance hence                                                 such aids.
closes an important gap in                Permanent disability
statutory accident insurance by also       In case of permanent disability        Recovery costs
covering the leisure sector -             within one year after the accident,     Concerning recovery of the
globally and around the clock!            the proportion of the insured           insured person after an accident or
An "accident" occurs when - as            amount corresponding to the             from the mountains or distress at
insurance      language     puts     it   percentage of disability will be paid   sea, costs of search and
somewhat awkwardly - "there is            out. You can read up about this         transportation up to the nearest
any sudden, involuntary external          percentage amount, which comes          passable road or to the nearest
event impacting on the body and           into effect upon a complete loss of     hospital will be reimbursed.
having a health-damaging result."         body parts or sensory organs or
                                                                                  Repatriation costs
Therefore, this does not include          upon full impairment, in the so-
                                                                                  If the accident has occurred
gradual physical damage - for             called "dismemberment schedule"
                                                                                  outside the place of residence of
example due to wear - nor disease.        that is part of the Terms and
                                                                                  the insured person, the cost of
The following are considered to be        Conditions     of    the     accident
                                                                                  medically recommended transport
part of an accident, for example:         insurance policy. In case of partial
                                                                                  to a hospital nearest his home will
Broken bones, sprains, strains and        loss or functional impairment of
                                                                                  be covered. If a fatal accident has
ruptures of muscles, tendons,             body parts or sensory organs (the
                                                                                  occurred, the costs of transporting
ligaments and capsules located            exact amount is determined by
                                                                                  the dead body to the place of the
on/in limbs and spine, and                your doctor), the percentage
                                                                                  last permanent residence of the
meniscal       injuries.   Insurance      amounts       listed      in      the
                                                                                  deceased in Austria will be paid.
coverage is possible for individuals,     dismemberment schedule will be
couples, families, children, relatives    reduced accordingly.                    In a nutshell
or company employees.                                                             Personal accident insurance makes
                                          In case of death, the insured
What is included, what is                                                         sense. This insurance is used as a
                                          amount will be paid out to the
excluded?                                                                         supplement to the state-provided
                                          beneficiary if the accidental death
The accident insurance is valid                                                   health and accident insurance and
                                          occurs within one year after the
+ at work and on business trips                                                   serves as protection against the
+ on the road                                                                     financial consequences of an
                                          The insurance also covers accident-
+ in the home                                                                     accident during leisure time,
                                          related costs incurred within four
+ during leisure, sports and                                                      especially in cases of permanent
                                          years after the accident. These
hobbies                                                                           disability.

6 KONSUMENT 5a/2012
                                                                                     Private liability insurance

                                                           Large and small mishaps

Personal liability insurance protects   that may jeopardize your very
                                                                                 Dogs often need to be insured
against damage caused by you as         existence. The sum can be quite
a private individual. It examines,      high, especially when damage has
                                                                                 Dogs are not readily included in
on the one hand, to what extent         been caused to other persons as a
                                                                                 liability insurance, and extra
claims asserted by any injured          result of your own carelessness
                                                                                 attention needs to be paid to this
third party will be recognized or to    and then the causer or the
                                                                                 aspect. Small animals such as cats
what amount they are justified.         insurance company must pay for
                                                                                 or      birds  are   automatically
After considering the obligation to     long-term pension costs.
                                                                                 covered. The following are
pay damages, compensation is            Personal liability insurance shall
                                                                                 excluded from coverage: own
either paid or unwarranted claims       apply either in Europe or
                                                                                 damage, claims asserted by
are rejected. In Austria, private       throughout the world. A world-
                                                                                 insured children and spouses /
liability insurance is usually          wide coverage makes sense if
                                                                                 significant others and claims from
combined         with      household    someone is frequently travelling
                                                                                 deliberately caused damage.
insurance - which has a long            outside Europe and does not want
tradition. Even a sole conclusion       to worry every time about taking         In a nutshell
without being combined with             out suitable liability insurance.        Die Personal liability insurance
household insurance is possible                                                  makes sense. It covers claims for
                                        The family is also covered
                                                                                 compensation when individuals
What is included, what is               The     insurance      covers      the
                                                                                 accidentally hurt someone or
excluded?                               policyholder and the spouse or
                                                                                 damage something. It is often
The coverage should amount to at        partner, if registered at the same
                                                                                 included in the household
least 750.000 €, better 1 or better     place of residence. The children
                                                                                 insurance, but it can also be
still 2 million euro, because for any   are also insured up to the age of
                                                                                 taken out separately.
amount exceeding the sum                (usually) 25 years if they live in the
insured                                 same household and have no
you must pay for yourself - and         income of their own.

                                                                                                       KONSUMENT 5a/2012 7
                                                                 Private supplementary health insurance

                                 For public health insurance patients

Additional private health insurance    consultation on an outpatient           to provide any benefits if
is a supplement to national health     basis, house calls, outpatient          information on a previous illness
insurance and, depending on the        surgery     in     private    medical   has been withheld.
selected      services,     includes   practices,     day     hospitals   or
payment of a tariff and free           outpatient clinics. There is a          In a nutshell
patient choice of physicians,          maximum annual amount for               Personal supplementary health
flexible waiting times, more           individual     services.       Dental   insurance is not exactly cheap.
comfort     when      in   hospital,   treatment insurance is available        Prior to taking out such an
reimbursement for alternative          only     in     combination      with   insurance, you should absolutely
therapy costs or the payment of a      supplementary        hospital    cost   compare providers. There is also a
daily allowance for hospital stays.    insurance and, usually, only 50 to      difference in the evaluation of pre-
                                       80% of treatment costs are              existing conditions (own health
What is included, what is              covered, with an annual limit of €      status) between providers.
excluded?                              500 up to max. € 2,800 per              You should definitely answer any
Supplementary private health           provider.                               questions      concerning     health
insurance offers many design           In the case of a daily allowance        truthfully, because the insurer
options.     The     supplementary     insurance plan, a fixed amount is       does not need to provide any
hospital cost insurance is the most    agreed in advance for each day of       benefits if information on a
expensive yet popular building         hospitalization. This is especially     previous illness has been withheld.
block. It covers the cost of an        worth considering for freelancers       Take advantage of savings
inpatient stay in a special class:     and the self-employed.                  opportunities, such as a restriction
multi-bed rooms or single rooms,       Important: The evaluation of pre-       to the essential areas and a
and treatment by the physician of      existing conditions or health status    possible return of premiums if you
your choice - depending on your        is not always equal: there is           do not claim on any of the services
plan selection.                        sometimes a big difference, from        covered. Also, a deductible or
Private      physician      medical    insurer to insurer. In any case:        discounts for family, or the entire
insurance covers the cost of           make sure you answer truthfully,        company        workforce     (group
medical      examinations       and    because the insurer does not need       insurance) can help you save.

8 KONSUMENT 5a/2012
                                                                                              Home insurance

                                                          Not everything is insured

Home insurance is a package               What is included, what is              motor vehicles, their trailers,
insurance. This insurance covers          excluded?                              motor and sail boats and
the entire household contents of          The insurance covers damage to         accessories, aircraft, merchandise
the home specified in the policy -        all mobile objects within the own      and commercial warehouses of all
this includes everything that is part     home. The insurance also covers        types, business money and money
of the interior design of a home, is      cash, securities, jewelry, stamps      from collections.
used there, or intended for               and         coin        collections;
consumption (such as furniture,           compensation limits apply for          Premium amount and sum
carpets,      curtains,      clothing,    these in case of burglary.             insured
household        items,      electrical   Additional equipment and fixtures      The amount of the premiums
appliances, computers, books). In         of the dwelling are also covered.      depends on the dwelling size,
addition, home insurance also             Home content is not only insured       equipment category, and the
includes personal liability insurance     when inside the home named in          scope of benefits desired. In
(see page 8).                             the policy but also in other areas     addition to the premium amount,
                                          such as the basement, the attic,       you should also look at other
Besides the property of the               on the premises, when moving, or       aspects    before    signing   the
policyholder, that of spouses or de       partially even when on the road.       contract: such as deductibles,
facto spouses, children and               However, secondary residences          exclusions and liability caps. The
relatives who live in the same            are excluded, as are weekend           home content is insured in more
household, is also insured. The           cottages and allotment gardens as      recent contracts for its original
property of house guests (unless          well as swimming, hunting and ski      value (= replacement cost). A
they are being accommodated for           lodges and other buildings that        properly chosen insurance sum
a fee) is also covered.                   are not permanently inhabited.         (corresponding to the actual value
                                          The insurance does not cover           of the home contents) will prevent
                                                                                 under-or over-insurance.

                                                                                                       KONSUMENT 5a/2012 9
                                                                                   Home Ownership insurance

                                                                                   Not only storm

Home        Ownership       insurance     will apply) and there is coverage        Premium amount and sum
(building      insurance)       covers    for the full cost of repairs in the      insured
damage to the fixed components            case of partial damage.                  The amount of the premium
of a building (foundation and                                                      depends on the size and scale of
basement walls, partition walls,          What is included, what is                the     insured     building,  the
suspended         ceilings,      paint,   excluded?                                equipment category, the condition
wallpaper, laminated floor and            Usual coverage includes loss or          of the house and the selected
wall covering, electrical and gas         damage       by    fire,    lightning,   insurance coverage. A properly
installations, water supply and           explosion, plane crash, storm (with      chosen         insurance      sum
sanitation     systems,      lightning    more than 60 km / h!) and                (corresponding to the actual value
arrester systems). Furthermore, it        consequential damage caused by           of the home) will prevent under-or
covers liability claims that include      falling trees or the like, hail, snow    over-insurance.
the property, and - usually in a          load, landslide and rockfall. Loss
limited manner - damage to                or damage caused by tap water,           In a nutshell
outbuildings      (garages,     sheds,    even from washing machines and           Both household and home
storage rooms) on the property.           dishwashers, damage caused by            owner’s insurance are essential.
                                          overflow of water and frost              There are a variety of offerings
In general, the building is insured       damage to water-carrying systems         and      coverage     differences,
for its replacement value. In the         are all included in the coverage.        therefore, you must compare! Not
event of a claim, therefore, the          Damage caused by natural                 all damage is insured, so pay
locally customary cost for building       disasters such as floods and             attention to limitations and
a new house will be reimbursed            avalanches is often not covered or       exclusions.
(the deadlines for reconstruction         only with very small sums.

10 KONSUMENT 5a/2012
                                                                                                   Life insurance

                                         What is life insurance all about?

Life insurance is a product that is      the annuity payment         can   be    each insurance year. Additional
offered in several forms for             arranged individually.                  premiums      (so-called    renewal
different purposes. The basic                                                    premiums) have to be paid within
definition of life insurance is that a   Unit-linked life insurance              two weeks, always from the due
fixed sum insured is paid at a           With unit-linked life insurance, the    date.
certain time or after the death of       insurance benefit is linked to the      But beware: If renewal premiums
the policyholder. It can be used as      performance of an investment            are not paid despite a written
collateral for loans, the providing      fund. The fund invests primarily in     reminder, and the statutory
financial security to families in the    securities,     therefore.       The    deadline that is stated in the letter
event of premature death, or for         agreement of guaranteed benefits        of formal notice has elapsed, the
retirement.                              is also possible. If, however, no       stipulated insurance coverage will
                                         guaranteed benefits have been           end prematurely.
Endowment           and       death      agreed with the insurer, the            Should it nonetheless become
insurance                                policyholder also carries the risk of   impossible to pay the premiums,
The "classic" endowment and life         loss up to a total loss.                there are various options: The
insurance is the combination of                                                  method of payment can be
death insurance and building             Arrangements for insurance
                                                                                 changed, a request can be
capital. The payment of the sum          coverage
                                         Coverage starts when you receive        submitted for deferment of the
insured is at the end of the agreed                                              premium for the insurance, the
contract term or upon death of           the insurance policy and have paid
                                                                                 amount insured can be decreased
the insured within the agreed            the first premium or one-off
                                                                                 or the agreement can be
term, in which case the insured          premium - but no earlier than the
                                                                                 converted to an agreement
sum will be paid out to the              date specified in the policy as
                                                                                 without a premium (with a lower
bereaved. The capital may be paid        marking the commencement of
                                         insurance cover. The insurance          amount insured). However, in any
out as a monthly pension or in a                                                 of these cases it is necessary to
one-off lump sum.                        contract and thus the insurance
                                                                                 contact your insurance agent to
                                         coverage will end by the
Term life insurance                                                              discuss    the     situation     and
                                         expiration date (in case of
Term life insurance and/or death                                                 determine the "best" variant for
                                         survival), or earlier, in the case of
benefit insurance is taken out to                                                you.
                                         death of the insured.
protect survivors in the case of
death, and or as collateral for          Premium payment.                        In a nutshell
loans. Single insured event is the       Premiums for life insurance are         Pure term life insurance makes
death of the insured. Upon the           either annual premiums or unique        sense to protect the family. The
expiration the agreed term, the          one-off premiums. The first (or         advice here is to draw a distinction
insurance lapses completely.             single) premium is payable              between       risk    and     safety
                                         immediately upon receipt of the         precautions. The need for long-
Pension Insurance                        policy. Of course, half yearly,         term precautionary products is
With pension insurance, you can          quarterly or monthly payments           generally     to     be    carefully
provide for your retirement and          can also be agreed, but only with       considered, since a long-term
your dependents. Upon maturity           a surcharge. Changes to the             commitment must be upheld in
of the contract you will receive a       method of payment can always be         this case. An early dissolution has
monthly pension. The duration of         requested at the beginning of           financial implications.

                                                                                                         KONSUMENT 5a/2012 11
                                                                                                  Travel insurance

                                                                          In the policy jungle
                                                                                  family member. The insurance
                                                                                  must generally be obtained at the
                                                                                  time the trip is booked. The
                                                                                  insurance coverage requires that
                                                                                  the reason for the cancellation
                                                                                  occurred after the trip was booked
                                                                                  and was not foreseeable by the
                                                                                  policy holder.

                                                                                  Travel third party liability
                                                                                  This assumes liability for damages
                                                                                  (property damage or bodily injury)
                                                                                  that is caused by the insured as a
The components of travel                  does not extend to treatments that      private person during a trip. This is
insurance can include:                    are the reason for travel,              often already covered by the
- Travel health insurance                 treatments that are foreseeable by      worldwide protection of the
- Travel accident insurance               the policy holder, treatment at a       private    third    party    liability
- Travel cancellation insurance           health resort, childbirth or special    insurance in the household
- Trip interruption insurance             services, for instance. Chronic         insurance.
- Travel     third   party    liability   illness that already existed upon
insurance                                 departure or risky sports are often     Baggage insurance
- Baggage insurance                       decidedly excluded or only covered      This insurance offers protection
                                          to a limited extent. An illness is to   from damage, destruction or loss
The insurance coverage starts once        be reported to the insurer as           (e.g. robbery, theft) of all objects
the insurance premium has been            quickly as possible. If you are         taken along on the trip for
paid and stops at the start of travel     covered by national insurance or        personal use. Jewelry, watches,
(e.g. cancellation insurance) or at       private health insurance, submit        furs, technical devices of all types
the end of travel, depending on           your claims first to these bodies.      including accessories (cameras,
the type of agreement. Unless                                                     camcorders, video equipment,
otherwise agreed, the insurance           Travel accident insurance               laptops,      optical     equipment,
coverage applies upon departure           It compensates for financial            consumer       electronics,   mobile
from the place of residence and           burdens after an accident on a trip.    telephones)        and       sporting
ends with the return there,               Benefits are paid out for lasting       equipment are only covered when
depending      on    the     variant,     disability, for the reimbursement of    they were stored securely and
worldwide or only in Europe.              costs for rescue and return and in      personally monitored or carried /
                                          the event of death. The amount of       used in such a way that that they
Travel health insurance                   coverage is usually low. Thus it is     could not be taken by a third party
This insurance covers medical             generally advisable to obtain           without having to overcome an
treatment for acute illness or as a       private accident insurance (see         obstacle. Examples of things that
result of an accident by the insured      page 7).                                are not covered include money,
abroad. Up to the level of the                                                    tickets, documents or vehicles, as
amount insured, the costs will be         Cancellation insurance
                                                                                  well as damages that result from
covered for out-patient treatment,        This insurance compensates for          forgetting, losing, leaving or failing
drugs, in-patient treatment in            cancellation costs or a cancellation    to monitor the baggage. Generally
hospitals,     transport     between      deductible if the trip is cancelled     the current value of the insured
hospitals, return transportation for      and if certain requirements are         objects is reimbursed. Special
medicinal      reasons      or   the      fulfilled like an accident, death or    conditions apply for baggage in a
transportation of the deceased or         illness of the insured or a close       vehicle or on a camp site.
local burial, for instance. Coverage
12 KONSUMENT 5a/2012

Acceptance declaration. Written        assurance companies provide the        Release from obligation to
confirmation that the insurer          option of covering hazards from        perform. If you as the policy
made a lump-sum payment after a        earthquakes, land subsidence,          holder do not fulfill your
claim was submitted and that you       landslides, flooding, snow damage      contractual            obligations
will waive any other claims for the    or avalanches, even though most        (Obligations), the insurer is not
insured event. Carefully consider      only cover a relatively small          required to pay benefits in the
whether you want to accept this        amount.                                event of damage or loss.
type of payment, because then
you will have to pay for any           Negligence. There is often cause       Replacement value. In the event
damages that subsequently come         for conflicts between the insured      of damage or loss, the amount
to light from the insured event out    the assurance company, above all       that would be necessary to
of pocket.                             in the differentiation between         procure a comparable product to
                                       slight and gross negligence.           the object insured is provided.
Assistance      services.     Many     Legally, gross negligence is when      Please note: This does not mean
insurers provide services or           the     necessary      care     was    that the insurer pays out the same
immediate help in the event of         disregarded to a particularly severe   amount that was originally
damage or loss in the form of a        extent. The insured thus did not       necessary for the purchase; the
telephone     number       available   do what would have to have been        replacement value is rather the
around the clock. Examples             clear to anyone with a sound           amount with which a product that
include immediate survey of            common sense, or violated certain      is as good as new can be
damage, the coordination of a          obligations. Damages that a policy     purchased at the time the benefit
place to stay or transport or the      holder contributed to intentionally    is paid out.
procurement of a tradesperson to       or as a result of gross negligence
repair the damage. These services      are usually not covered. If they       Obligations. Duties of the policy
are usually included in the more       are, they must usually be              holder. For example, honest and
expensive policies or are included     "bought" with higher premiums          correct details must be provided in
in    the    agreement      for    a   and are capped with a maximum          the      insurance        application.
commensurate increase in the           payout.                                Furthermore, the insurer must be
premium. Please note: Only the                                                notified if the risk increases during
procurement or coordination is         Index clause. Value                    the term of the agreement; in the
included at no cost, but that does     adjustment (clause)                    event of loss or damage,
not mean the service that is                                                  everything possible must be done
procured is automatically included.    Goodwill. The insurer is not           to mitigate and prevent further
The tradesperson only bills the        legally    required    to    provide   damage, the necessary legal
insurer directly when they are         benefits,     but     pays      them   reports must be filed and the
responsible for compensating for       nonetheless as a matter of policy,     insurer must be provided all of the
the damage.                            for instance. This is different from   relevant information. If that is not
                                       cases where a legal decision is        done, the insurance coverage may
Combined       policy.    Legally      omitted because it would result in     be partially or entirely forfeited.
independent insurance sectors          significant expenditures and the
with    their   own    insurance       same a settlement was able to be       Cash value. In the event of early
conditions are bundled together,       reached out of court but               termination of a live insurance
for example fire, water pipe           nevertheless benefits are provided.    agreement, you will only be
damage and household insurance         Goodwill solutions are sometimes       reimbursed for a small portion of
into home insurance.                   only offered when the amount           what you have paid. Terminating
                                       insured increases in return or a       the insurance agreement is always
Natural hazards. Damage that           new agreement is signed. It is only    a bad business decision in the first
can be caused by the elements          really useful when the new             ten years, because a significant
fire, water, earth and wind. With      insurance or the increased amount      portion of the premiums initially
regard to household and home           insured is actually desirable -        cover the administration and feed
insurance, natural hazards may         otherwise it is purely horse           of the insurer.
not be fully covered. Some             trading!

13 KONSUMENT 5a/2012
Deductible.       Reduces       the     Waiver of underinsurance. The            Waiting periods. In some
premium; however, for that you          insurer is obligated to make no          insurance sectors (e.g. legal
must also pay a part of the             objection to underinsurance in the       protection and health insurance)
damage out of pocket. If over the       event of loss or damage. The             there are waiting periods of up to
course of the year damages occur        policy holder must usually sign an       nine months before the insurance
- even if they are small - they can     indexation       clause      (Value      coverage is in effect. This allows
have a significant effect on the        adjustment) for this.                    the insurer to prevent people from
bottom       line    (e.g.     with                                              only becoming insured when they
comprehensive insurance), since         Policy conditions. Description of        know that they will need to claim
the deductible is billed for every      the "product content": What is           the insured benefit (for previously
claim - thus not once per year but      insured (= defined benefits) and         initiated     litigation,  existing
per damage.                             what is not (= exclusions), how is       pregnancy, etc.).
                                        insured for how long and how can
Activity clause. Is used for the        one exit the agreement (=                Value adjustment (clause).
third party liability with regard to    terminate). Even though it is            Automatic adjustment of the
household        insurance       and    recognized as one of the most            premium and amount insured
differentiates      very    precisely   tedious reads - you must read it!        according to the consumer price
between deliberate and desired                                                   index published by Statistics
effects on an object, on the one        Preliminary confirmation of              Austria (either for the household
hand, and accidental, undesired         cover.     Preliminary    insurance      or legal protection insurance) or
contact with an object, on the          coverage, particularly for third         the building-cost index (for home
other hand.                             party liability insurance, but also      insurance). If the premium is not
                                        for life and natural hazard              adjusted automatically, only the
Overinsurance.     The     agreed       insurance       (like    household       corresponding portion of the costs
amount insured is higher than the       insurance). You enjoy insurance          will be paid out in the event of
actual value of the insured             coverage even before the policy is       loss or damage.
objects. This means you are             created and the first premium has
paying too high of a premium            been paid and thus the actual            Current   replacement         cost.
because in the event of loss or         agreement is established.                Replacement value
damage you will only be
                                                                                 Current value.       Value of an
compensated for the actual value.       Pre-contractual         duty        of
                                                                                 object at a specific point in time.
                                        disclosure. You have a duty to
Installment surcharge. If you do                                                 The       difference      between
                                        disclose with the insurer when
not pay the premium for the                                                      Replacement value and current
                                        preparing the application all of the
entire period insured in one                                                     value depends on the actual
                                        relevant circumstances for the risk
payment in advance, but rather                                                   depreciation from age, use,
                                        to be insured of which you are
monthly, the insurer can claim a                                                 technical development and the
                                        aware. This is part of the
surcharge (e.g. 6 percent for                                                    like.
                                        Obligations of the policy holder,
monthly payment).                       the violation of which can lead to
                                        the insurer being released from its
Underinsurance.        The agreed       liability to pay benefits. Even if the
amount insured is lower than the        insurance agent does not explicitly
actual value of the insured objects.    ask: If you are aware of a
This means you are paying a lower       circumstance that is significant for
premium, but only part of the           the estimation of the risk and thus
actual amount of damage will be         for the amount of the premium,
paid out in the event of loss or        you must share this information.
More information
Books from KONSUMENT

                                  Policy check
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                                  From the contents
                                   Which insurance policies are actually necessary
                                   What minimum coverage makes sense
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                                   Tips to save money in all of the insurance sectors
                                   Note: Cases in fine print
    2nd, updated edition

The complete book program from KONSUMENT with other titles from the
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Expert hotline of the VKI
For advice on insurance questions over the phone, call our paid hotline 0900 410 015
(max. 1.36 euro per minute), Monday through Friday, from 9am to 3pm.

Tests, analyses, reports on insurance topics are regularly included in the test magazine
KONSUMENT. More info at

                           Versicherungsverband Österreich
                           (Austrian Insurance Association)
                           Information center, Schwarzenbergplatz 7, 1030 Vienna,
                           Phone: +43 1 711 56-0, Fax: +43 1 711 56-270

 Translations of this document in English, Turkish, Croatian an Serbian are
  available on the Internet:

                                                                                              KONSUMENT 5a/2012 15

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