With old houses, the picture is rarely clear-cut: the street-facing part is brick, the rear extension is adobe (sun-dried mud brick), one half of the roof is tiled and the other slate, nobody knows the exact year of construction, and the floor area was filled in from the land registry extract or from memory. Yet the policy has a single box for each: “brick”, “tile”, “1965”, “98 m²”. The question is not whether there is a penalty for this, but what happens when there is a claim and the loss adjuster sees something different on site from what is on paper. As a broker, I see two misconceptions surrounding this situation: “they won't pay anything anyway” and “they won't make an issue of one box” – neither is true. The rule is laid down in the Hungarian Civil Code (Ptk.), and the consequence depends on whether the incorrect data is connected with the damage – this is what this article explores, together with what you can still do before a claim.
- Under Section 6:452 of the Hungarian Civil Code (Ptk.), every material circumstance that the policyholder knew or ought to have known must be disclosed when the contract is concluded; truthful answers to the insurer's written questions fulfil this duty, and leaving a question unanswered is not in itself a breach.
- With incorrect data, the insurer's obligation to pay does not arise – unless the policyholder proves that the insurer knew the true data or that the data did not contribute to the occurrence of the damage: so the wrong wall material typically does not matter in a burglary, but with water ingress it can easily stand in the way of payment.
- Deducting the premium difference or paying proportionately follows not from the law but from the specific policy conditions, so it varies from insurer to insurer – the most effective safeguard is to review the data on your policy and report any discrepancy in writing before a claim arises.
What does the Ptk. say about the duty of disclosure?
Under Section 6:452 of the Ptk., when the contract is concluded, the policyholder must disclose to the insurer every circumstance material to the insurer's acceptance of the risk that they knew or ought to have known. The same section also contains two important reliefs: by giving truthful answers to the insurer's written questions, the policyholder fulfils the duty of disclosure, and leaving the questions unanswered does not in itself constitute a breach of that duty. In practice, therefore, what counts as material is what the insurer asks on the proposal form – wall material, roofing, year of construction, floor area, type of use and security measures are typical examples – and the yardstick is that the answer corresponds to reality. Why these data are of interest to the insurer and how they influence the risk classification is covered in the article on wall materials and roofing; here the subject is the consequences.
With your own property, the phrase “ought to have known” is stricter than you might think: an owner can be expected to know what the walls of their house are made of, even if not the exact year of construction. If you really are unsure, the honest route is not a guess but a note: stating in a remark on the proposal form that the walls are of mixed construction or that the year is an estimate, and leaving it to the insurer to decide how to classify it – in that case you have given an answer that corresponds to reality. Hungarian policy conditions typically treat mixed walls according to the predominant material or the less favourable one, but this varies from insurer to insurer, so it is worth checking the definition in the policy conditions.
In a claim: when does the insurer's obligation not arise – and when does it?
Section 6:452 of the Ptk. also sets out the consequence: if the duty of disclosure or the duty to report changes is breached, the insurer's obligation to pay does not arise, unless the policyholder proves that the insurer knew the concealed or unreported circumstance when the contract was concluded, or that the circumstance did not contribute to the occurrence of the insured event. This means three things at once. First: incorrect data does not lead to automatic rejection, because the absence of a connection exonerates the client. Second: here it is not the insurer that has to disprove this connection – the policyholder has to prove that there is none; this is where this rule differs from the exemption of the insurer, where the insurer has to prove gross negligence, and from an exclusion, which is not an insured event in the first place. Third: if the contract covers several items of property, the insurer can rely on the breach only in respect of the item concerned and must pay for the rest.
To stay with the example: an adobe wall instead of a brick one obviously does not contribute to the occurrence of the damage in a burglary or a glass breakage – the wall material has no bearing on whether the burglar got in. With water ingress after a burst pipe, however, the situation is more debatable: adobe is far more sensitive to moisture, the nature and extent of the damage depend on the wall material, and the insurer may argue that the wall material contributed to the damage – whether this falls within the statutory notion of “contribution” is decided on the basis of the specific damage, and the burden of proof lies with the policyholder. A wrongly stated year of construction rarely “causes” damage by itself, but if it conceals outdated wiring or pipework or a combustible roof structure, it can be linked to fire or water damage. An incorrect floor area is yet another category: this is typically a question not of the duty of disclosure but of the amount – if, as a result, the sum insured stays below the real rebuilding value, the article on underinsurance describes how the insurer pays proportionately.
Premium difference, proportionate payment, amendment: what the policy conditions add
The Ptk. only states when the insurer's obligation does not arise; Hungarian policy conditions often also contain milder, intermediate solutions. Under some conditions, if a higher premium would have been due on the basis of the true data, the insurer pays the claim in the ratio of the premium paid to the correct premium; others provide for charging the premium difference retrospectively or for a partial reduction of the benefit. These are not statutory obligations but contractual undertakings, so they vary from insurer to insurer, and you have to look for them in the “duty of disclosure” or “limitation of the insurer's obligation” section of your own policy conditions. It is not advisable to regard incorrect data as a foregone conclusion, either as a rejection or as a simple premium difference: the outcome is decided by the specific policy conditions and the specific damage together.
It also matters what happens if the insurer learns of the true data not at the time of a claim but earlier – for example, during an inspection or in connection with another case. Under the insurance chapter of the Ptk., in such a case – if the true circumstance means a significant increase in the insured risk – the insurer may, within a short deadline from becoming aware of it, propose an amendment to the contract or terminate the contract; if the client does not accept the amendment, the contract may come to an end. This is not a threat but the way to clarify things: a contract amended with the correct data is worth more in a claim than a cheaper but challengeable policy. Reporting changes belongs here too: if the house has changed in the meantime – an added storey, a roof replacement, a new use – this must be reported in the manner and within the deadline set out in the contract, under Section 6:452(2), as detailed in the article on changes to your details.
How does it come to light at the inspection, and what can you still do before a claim?
On site, the loss adjuster sees not the policy but the house: the adobe in the damaged section of wall, the roof structure in the loft and the actual floor area on the floor plan all become apparent from a single visual inspection, and the true data goes into the report. That is why a discrepancy between the policy and reality is not something you can “get away with” – only its consequence depends on what the damage is. The solution is simple, and it has to be done before a claim. Take out your policy – the copy you received when you took out the insurance, not just the indexation letter – and compare the building data with reality: wall material, roofing, year of construction, floor area, use, number of storeys, outbuildings. Under the Ptk., the policy is issued on the basis of the proposal, and if its content differs from the proposal, you must object to the discrepancy without delay after receiving the policy, otherwise the contract is concluded on the terms of the policy (in the case of a material discrepancy, only if the insurer drew your attention to it in writing when handing over the policy) – which is why the article on the process of taking out insurance regards checking the policy as the final step of taking out cover. If you find a discrepancy, notify the insurer in writing and ask for the data to be corrected and, if necessary, for the premium to be recalculated; keep the reply letter with the policy, because in a claim it proves that the insurer knew the true data. Disclosure and reporting changes are your non-transferable obligations, which the broker cannot take over on your behalf; if you have a question about the data on your policy, let me know and I will help where I can.
What should you do now?
If there is no claim yet: review the building data on your policy and have any discrepancy corrected in writing. If there is already a claim and the discrepancy came to light at the inspection: do not argue on site; instead, gather what proves that the incorrect data did not contribute to the occurrence of the damage, or that the insurer knew the true data earlier (an earlier inspection, correspondence, photos attached to the proposal), and submit this in reply to the insurer's written position. If you dispute the insurer's position, the route is the insurer's complaints procedure, and then, as a consumer, the Financial Arbitration Board (PBT) or the courts – the article on how a claims dispute proceeds also sets out the deadlines.
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Sources
- Hungarian Civil Code (Ptk.) Section 6:452 – duty of disclosure and duty to report changes, legal consequence of a breach (Act V of 2013)
- Hungarian Civil Code (Ptk.) Section 6:460 – underinsurance, proportionate payment (Act V of 2013)
- MABISZ (the Hungarian insurers' association) Home Insurance Guide (20 February 2025) – point 12/a: the duty of disclosure and the consequence of breaching it; point 7: the insurer's proposal to amend the contract and its termination
- UNION Vienna Insurance Group – home insurance conditions, point 3.3 (policy differing from the proposal), point 6.1 (significant increase in risk)
