On Christmas Eve a candle was left burning on the windowsill and the curtain caught fire. In the morning rush the hob was left on, and the pan forgotten on it burned out the kitchen units. Someone was running a bath, fell asleep, and the water soaked two flats below. These are the most common household losses, and after reporting the claim many people fear the same thing: the insurer will say ‘that was gross negligence’ and refuse to pay. The fear is partly justified and partly not. Home insurance conditions do indeed state that the insurer is released from paying in the case of grossly negligent conduct by the policyholder, the insured person or a relative living in the same household as them – but what counts as grossly negligent is much narrower than everyday carelessness. This article is about where that line lies, and about what happens if the damage was caused not by you but by a family member, a guest or a tenant. The map of exclusions is provided by the article on exclusions; here we look at the other side: exemption.
- Exemption is not an exclusion: the fire or water damage is an insured event, yet the insurer may be released from paying if it proves that the damage was caused unlawfully, intentionally or through gross negligence by the policyholder, the insured person or a relative living in the same household (Section 6:464 of the Hungarian Civil Code, Ptk.).
- Simple carelessness – burnt food, a forgotten candle – is not in itself gross negligence; the line is drawn by case law and by the non-exhaustive lists in the policy conditions, and the burden of proof lies with the insurer.
- The negligence of a guest, relative or tenant who does not live in your household does not release the insurer: in such cases the insurer pays and can recover the amount from the person who caused the damage under Section 6:468 of the Ptk.
Exclusion and exemption: not the same thing
The two concepts are often confused in claims as well, yet they work differently. An exclusion means that the loss in question is not an insured event in the first place: Hungarian conditions typically exclude from storm cover the damage caused by rain pouring in through a window left open, and burglary cover typically does not pay for the loss caused by a thief slipping in through an open window, because the conditions require forced entry or entry in a manner described in the conditions. In such cases the insurer does not need to prove anything about anyone's conduct; there is simply nothing for it to pay for. Exemption, by contrast, means that the insured event – the fire, the water damage – has occurred and the contract would cover it, yet the insurer is released from its obligation to pay because the damage was caused by unlawful, intentional or grossly negligent conduct of the person concerned. Under Section 6:464 of the Hungarian Civil Code (Ptk.), the insurer is released if it proves that the damage was caused in this way by the policyholder or the insured person, or by a relative living in the same household as them; the same rule applies to breaches of the duty to prevent and to mitigate damage. The Home Insurance Guide of MABISZ (the Hungarian insurers' association) specifically emphasises that the facts giving rise to exemption must be proved by the insurer in every case. In practice this means that it is not you who must show that you were careful, but the insurer that must show that you were flagrantly negligent.
Where is the line between carelessness and gross negligence?
The Ptk. does not define gross negligence, so the line is drawn by case law and by the policy conditions. The courts treat gross negligence as a conspicuous, flagrant disregard of due care: the question is not whether someone made a mistake – nearly every loss can be traced back to some human error – but whether they disregarded the risk with conscious recklessness, having recognised it or when it was recognisable. Simple negligence, a momentary lapse of attention, is a natural part of indemnity insurance: this is precisely the kind of loss that contracts are taken out for. The difference is best illustrated with examples. A lunch burnt because the doorbell or the phone was a distraction is carelessness; going to bed drunk and leaving a pan full of hot oil on the hob is a different matter. A tealight forgotten in the bathroom is carelessness; leaving a Christmas tree decorated with burning candles unattended and going out already points towards gross negligence. A cigarette smoked in bed, a connection that has been dripping for months and that the plumber has already pointed out but that has not been repaired, an unheated house left in winter with the main water valve open, do-it-yourself gas work without a permit – these are the situations in which insurers typically dispute payment – but even then it is they who must prove gross negligence.
Hungarian policy conditions typically help with a non-exhaustive list: many conditions classify it as grossly negligent if the damage occurred in connection with the insured person being drunk or under the influence of drugs (the conditions set the threshold differently), if an activity requiring a permit was carried out without a permit or unprofessionally, if fire safety regulations were seriously breached, if a damage-prevention measure required by the insurer or an authority was not taken, or if the loss recurs, under unchanged circumstances, after an earlier loss arising from the same cause. These lists vary from insurer to insurer, and in your own conditions you will find them in the chapter on exemption (mentesülés) – the guide to reading policy conditions highlights this chapter specifically. What to watch out for: the list is non-exhaustive, so the insurer may also invoke gross negligence in other cases, but even then it must prove that the conduct was flagrant and that it was causally linked to the loss.
And if a family member caused it?
In addition to the policyholder and the insured person, Section 6:464 of the Ptk. also brings the conduct of a relative living in the same household as them within the scope of exemption. So two conditions must be met together: the family relationship and the shared household. Who counts as a relative is listed in Section 8:1 of the Ptk.: the spouse, lineal relatives, adopted children, stepchildren and foster children, adoptive parents, step-parents and foster parents, siblings, as well as the cohabiting partner, the spouse of a lineal relative, the spouse's lineal relatives and siblings, and a sibling's spouse. So if your spouse, partner or child living with you, or a parent living in the flat, leaves a candle burning in a flagrantly reckless way, the insurer can invoke exemption just as if you had done it yourself. The case of a small child is more nuanced: negligence presupposes the capacity for discernment, so in practice a nursery-age child's behaviour is not necessarily treated as gross negligence – in such cases it is rather the failure of the supervising adult that comes under scrutiny, which can also give rise to a dispute.
It is also worth thinking about this the other way round: the negligence of someone outside the exemption circle does not release the insurer. That circle, however, also depends on the conditions: besides relatives living in the same household, Section 6:464 of the Ptk. allows employees in a position defined in the conditions and agents (megbízott) to be included as well, and several Hungarian home insurance conditions expressly name the person entrusted with looking after the property. A guest arriving for the weekend, a sibling living elsewhere, a grandparent who looks after the grandchild but lives elsewhere, or a tenant is a third party as far as the insurance is concerned – and so, typically, is someone doing occasional work in the flat, for example the painter who left flammable thinner next to the convector heater, unless the conditions also bring such agents within the exemption circle. In these cases the insurer pays you in line with the conditions and can recover the amount paid from the person who caused the damage under Section 6:468 of the Ptk. The law exempts only one circle from recourse: relatives living in the same household as the insured person. In practice this means that the insurer will not go to court over a guest's minor carelessness, but in the case of a tenant's gross negligence you can expect the insurer to turn to the tenant – or to the tenant's liability insurer. That is why the article for landlords recommends that the tenant should have their own personal liability cover.
What does the insurer examine, and how is the dispute decided?
For a fire, the most important document is the official fire incident certificate issued by the disaster management authority (katasztrófavédelem), or – if a fire investigation has been opened – the fire investigation report: the fire service records the place of origin and the presumed cause, and the insurer builds on this. For water damage, the inspection, the plumber's opinion and your own statement are what count. The insurer takes down a questionnaire or a written record of who did what and when – it is worth answering calmly, factually and honestly, because a false statement can have separate legal consequences, while admitting mere carelessness is not in itself a ground for exemption. If the insurer refuses the claim citing exemption, ask in writing for the reasons and for what it bases the gross negligence on: the burden of proof is on the insurer, and a general reference (‘you did not act with due care’) is not enough. The route for the dispute is then the insurer's complaints procedure, followed by the Financial Arbitration Board (PBT) or the courts – the MNB (Hungary's central bank and financial supervisor) does not decide individual claims disputes. The order and the deadlines are described in the article on legal remedies.
What should you do?
Prevention is worth the most, and that is not a cliché: do not leave a naked flame unattended, do not leave the hob for any length of time, have any reported water leak repaired, and comply with the conditions on longer absences – main water valve, heating – because a breach of the duty to prevent damage can also be a ground for exemption. If something has happened, mitigation comes first: putting out the fire, cutting the power, closing the main valve, alerting the neighbours. Then report the loss on the insurer's claims line, explain honestly what happened, and keep the fire investigation documents, the photos and the plumber's opinion. If the claim is refused, ask for written reasons supported by facts, and if the insurer cannot prove gross negligence, make use of the complaint and arbitration options. In a stuck or disputed case, I act on the client's behalf and help where I can – but the primary route for reporting a claim is the insurer's claims line.
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Sources
- Hungarian Civil Code (Ptk., Act V of 2013) Section 6:464 – exemption of the insurer; Section 6:468 – recourse claim; Section 8:1 – definition of relative
- MABISZ (Hungarian insurers' association) Home Insurance Guide (20 February 2025) – point 14: exemptions and exclusions, the insurer's burden of proof (pages 22–23)
- Financial Arbitration Board (PBT, MNB) – in the case of a disputed refusal
- Alfa Vienna Insurance Group – Családi Otthon (family home) insurance, CSOB2000 rules, point V.6 – exemption (employee or agent entrusted with the property)
