Disputing a claim settlement: complaint, Financial Arbitration Board, court – order and deadlines

The letter that arrives at the end of claims handling rarely brings joy if the amount is around half of what you expected – or if the insurer does not pay at all. Yet a dispute has an order of its own: successive steps that build on one another, each with its own rules and deadline, and several of them free of charge. As a broker, I see that a good share of stuck claims remain unresolved not because the client is in the wrong, but because they raise the matter with the wrong forum, in the wrong order or too late. This article sets out the order and the deadlines side by side.

Step zero: reopening the claim, even before the complaint

Before you write a complaint, it is worth clarifying what exactly you are disputing. The insurer's decision can be of two kinds: either it rejects the legal basis (not an insured event, exclusion, exemption of the insurer, delay), or it sets the amount lower (depreciation, underinsurance, a limit, payment only for the damaged part). The two cases call for different evidence, so the first step is a request: ask the insurer to provide, in writing, the itemised calculation and the clause of the policy conditions on which it based its decision – if you do not ask, the claims handler typically does not send it. How the amount is built up is described in the article on loss assessment and settlement, and the crash course in reading policy conditions helps you find the relevant clause. Many cases are already decided at this point, by a second quotation or a photo that was missing. Watch out for two things: do not sign a settlement offer while you are disputing the amount, because a signed settlement typically closes the dispute; and if the insurer does not move, do not let a request for review replace the formal complaint, because the next forums look at your complaint and the reply to it.

Step 1: a written complaint to the insurer – 30 days

Under the complaint-handling rules of Act LXXXVIII of 2014 on insurance activity (the Insurance Act, Bit.), the insurer must allow the client to make a complaint both orally – in person or by telephone – and in writing; it must give a reasoned written reply to a written complaint within 30 days of its submission. In a dispute, the written route is the sensible one, dated and with proof of receipt. A complaint is usable if it contains the policy number and the claim number, what you are disputing (the legal basis or the amount), what you rely on (the clause of the policy conditions, your own evidence) and exactly what you are asking for. Under the complaint-handling rules, a rejecting reply must also tell you which forum you can turn to next – if this is missing, that in itself is a procedural error. Two misunderstandings: a complaint is not the same as a claim notification, which is made on the insurer's claims line; and under the Hungarian Civil Code (Ptk.), a complaint letter does not in itself interrupt the limitation period – we return to this at the end. If you get stuck formulating the complaint, let me know: I help where I can – in comparing the reasoning with the policy conditions and in structuring the complaint. The complaint, however, is submitted by you, because it is your statement to the insurer.

Step 2: the Financial Arbitration Board – free of charge, 90 days, binding decisions up to HUF 2 million

The Financial Arbitration Board (PBT) is an independent body operating alongside the MNB (Hungary's central bank and financial supervisor) which, in contractual disputes between a consumer and a financial service provider – including a home insurance claim dispute – attempts to bring about a settlement and, failing that, makes a decision. According to the MNB's guidance, the basic condition is that you first try to settle the dispute with the insurer: you can turn to the Board if you are not satisfied with the insurer's reply, or if you have received no reply after 30 days. The procedure is free of charge; no procedural fee or duty is payable. The application can be submitted on the Board's form by post (1525 Budapest, Pf. 172.), in person at the MNB's customer service, at a government office (kormányablak) or on the PBT's online platform with Ügyfélkapu (Hungarian government e-ID) authentication; the Board does not accept applications by e-mail.

The deadline is clear: there are 90 days from receipt of the complete application, which the chair of the Board may extend by no more than 30 days; according to the MNB, cases are typically closed within 50–60 days. There are three possible outcomes. If the insurer accepts the claim, a settlement is reached. If not, and the Board finds the application well founded, it issues a binding decision if the insurer has made a declaration of submission or if the amount claimed does not exceed HUF 2 million – in the latter case, the law allows a binding decision even without a declaration of submission. If the claim exceeds HUF 2 million and the insurer has not made a declaration of submission, the Board issues a recommendation, which the insurer is not obliged to follow. If the application only asks for equitable treatment – that is, it does not dispute the legal basis or the amount – the Board terminates the procedure if no settlement is reached, and in that case there is no binding decision; if you dispute the claim settlement, do not submit a request for equitable treatment. The PBT's decision does not close off the route to court; the burden of proof is yours here too, so attach the policy conditions, the correspondence, the photos and your quotations.

The MNB: guardian of the rules, not judge of the claim

Most mistakes stem from the client expecting the Magyar Nemzeti Bank to decide the claim amount. The MNB's consumer-protection procedure, however, examines the insurer's conduct: whether it replied within 30 days, whether it gave the mandatory information, whether it acted in line with its own complaint-handling policy. If it finds a breach, it can sanction the insurer – but it does not determine whether a payment is due, or how much. Under the MNB Act and the MNB's guidance, a dispute concerning the formation, validity, legal effects and termination of the contract, or a breach of contract – in other words, an individual claim dispute – is not the subject of a consumer-protection procedure; its forum is the Financial Arbitration Board or the court. What is worth using the MNB for is information: the Pénzügyi Navigátor (Financial Navigator) advisory office network provides free, in-person advice in the county seats and helps with wording the complaint and the PBT application. The article on common reasons for rejection helps with classifying your case: a procedural error or a genuine dispute over substance.

Step 3: court – and the limitation period, which keeps running in the meantime

Ultimately, the court decides on the legal basis and the amount. This is the only step that has a cost – court fees, a lawyer, an expert – so weigh up whether the disputed amount is in proportion to it; if you have legal protection insurance, a lawyer paid by the insurer can help, according to its policy conditions.

And here comes the deadline that runs throughout the whole process. Under Section 6:22 of the Ptk., the general limitation period for claims is five years, but insurance policy conditions typically set a shorter limitation period – in many contracts one or two years – for claims arising from the contract, usually counted from the occurrence of the insured event. This varies from insurer to insurer, so look for the clause on limitation in your own policy conditions. Under Section 6:25 of the Ptk., the limitation period is interrupted by acknowledgement of the debt, by a settlement or by enforcing the claim in court – not by a complaint letter, an exchange of letters or the claims handler's verbal promise. A complaint and an arbitration procedure together can take three to five months; if the policy conditions set a short limitation period, the deadline can expire during the dispute. Do not assume a general rule on how the duration of the arbitration procedure affects the limitation period: if the deadline is close, get legal advice before postponing the court step while waiting for the PBT's decision.

What should you do in practice?

• Ask in writing for the itemised calculation and the clause of the policy conditions on which the decision is based; read your own policy conditions, especially the clause on limitation.
• Decide what you are disputing – the legal basis or the amount – and gather evidence for it: photos, a second quotation, an expert opinion, the claims correspondence.
• Submit a written complaint with the policy and claim numbers and a precise request; keep the proof of receipt and count the 30 days.
• After a rejection, or 30 days without a reply, submit the PBT application with the complete documentation; below HUF 2 million, the decision can be binding on the insurer.
• If the insurer has breached a procedural rule, report it in a consumer-protection application to the MNB – but do not expect a decision on the claim amount there.
• If the dispute is heading for court, assess the limitation period and the costs in advance, and get legal advice.

If your claim gets stuck or the reasoning is unclear, let me know: I help where I can – in comparing the policy conditions with the decision, in organising the evidence, in choosing the right forum. The complaint, the application and the signature, however, remain yours, as does the decision on how far to take the dispute. Where the line lies here is described in the article on stuck and disputed claims.

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Sources

• MNB – Financial Arbitration Board (PBT): How to initiate the procedure
• MNB Pénzügyi Navigátor (Financial Navigator) – Complaint to the service provider
• Act LXXXVIII of 2014 on insurance activity (Insurance Act, Bit.) – complaint handling
• Act CXXXIX of 2013 on the Magyar Nemzeti Bank (MNB Act) – consumer-protection procedure, Financial Arbitration Board
• Hungarian Civil Code (Ptk.) Sections 6:22 and 6:25 – limitation and its interruption

Related articles

• Loss Adjustment and Settlement: How Is the Payout Figure Reached?
• A Stuck or Disputed Claim: When and How the Broker Can Help
• Common Claim Rejections — an Honest Look
• Supplying Missing Documents: What the Insurer Asks for, and How to Submit It Well