Case

Zachary, delivery boy for Red Hot Pizzas, uses his own vehicle for his work. Believing himself bound to do so, he took out a motor insurance policy without realising that the same risks for liability were covered by the insurance taken out by his employer. What remedy, if any, is available when Zachary's insurance policy is with (a) the same insurance company as his employer and (b) a different company?

Discussions

Austria

(a) § 59 of VersVG, Austrian Insurance Contract Law of 1959, provides for double insurance when the insurance is concluded with two different insurers. In my opinion § 60, which allows the insured to terminate the insurance contract concluded at a later point in time, cannot be directly applied. This provision requires that the insured is obliged to terminate immediately after he has recognised that there is double insurance. Application of this provision by analogy seems to be pretty reasonable, although unfortunately no comments could be found in case law nor in scholarly opinion.

In addition, annulling on the grounds of mistake (a mistake shared by both parties) is possible according to scholarly opinion and case law. According to the prevailing view, annulment would have effect ex nunc.

(b) Zachary can terminate the contract with another insurer as a result of §§ 59 ff. VersVG. Moreover, Zachary is obliged to cancel the second contract immediately after he has found out about the double insurance.