Austrian Insurance Contract Act (VersVG)

Subject matter

The Insurance Contract Act (Versicherungsvertragsgesetz, VersVG) of 1958 governs the private-law relationship between insurer and policyholder in Austria: the pre-contractual duty of disclosure and the consequences of its breach, increase of risk during the policy term, the duty to avert and minimise loss when a claim occurs, the maturity and limitation of claims, and general and specific provisions for the individual lines of business (indemnity insurance, life insurance, accident insurance, liability insurance). The VersVG is supplemented by each insurer’s general policy conditions (Allgemeine Versicherungsbedingungen, AVB), which fill out the statutory framework within the individual contract.

Mandatory and non-mandatory law

A large part of the VersVG is drafted as semi-mandatory law in favour of the policyholder, meaning policy conditions may not deviate from it to the policyholder’s detriment; for large commercial risks, however, broader freedom of contract applies. Consumers in particular have a 14-day right of withdrawal after conclusion of the contract.

Relevance for insurance practice

As lex specialis to the general civil code (ABGB), the VersVG forms the legal basis for practically every insurance contract concluded in Austria; intermediaries and advisers must know its mandatory provisions to correctly inform customers about policy conditions, withdrawal rights, and deadlines. Unlike the VAG, which governs prudential supervision of undertakings, the VersVG directly governs the rights and duties arising from the individual contractual relationship.