A Casco refusal, or compensation that covers half the repair: these are the two most common disputes between car owners and insurers. Casco (comprehensive motor insurance) is voluntary, and its scope depends on the contract and the general terms and conditions. But the Insurance Code (Кодекс за застраховането, КЗ) sets limits the insurer cannot cross. A refusal is permitted only in exhaustively listed cases, and compensation must correspond to the damage actually suffered.
In this article we explain what Casco usually covers, when the insurer can lawfully refuse, how compensation is set "by expert valuation" and "by garage repair", what a total loss is, and how to challenge the valuation: with an objection, a complaint, a conciliation procedure or a court case with a motor-engineering expert.
What does Casco cover, and where do the rules come from?
Casco is property insurance for land vehicles. The specific risks (road accidents, natural disasters, fire, vandalism, theft, falling objects) are described in the policy and in the insurer's general terms and conditions. The general terms bind the policyholder if they were handed over when the contract was concluded and the policyholder stated in writing that they accept them. Where the contract and the general terms differ, what was agreed in the contract prevails (Art. 348(1) of the Insurance Code). The insurer may not refuse access to its general terms (Art. 348(3)).
So the first step in any dispute is to have three documents in front of you: the policy, the general terms in the version in force on the date the contract was concluded, and the report of the inspection carried out when the policy was taken out, if there was one.
From our practice: Many refusals are due not to the damage itself but to the way the contract was concluded: undeclared old damage, inaccurate details of the car or the drivers, a "package" that does not include a particular risk. Before you sign the policy, check what is recorded in the inspection report and which risks are included.
When can the insurer lawfully refuse to pay?
The law lists the grounds exhaustively. The insurer may refuse to pay only (Art. 408(1) of the Insurance Code):
- where the insured event was intentionally caused by the person entitled to receive the compensation;
- where it was intentionally caused by the policyholder so that the compensation would be received by another person;
- where there was a failure to perform an obligation under the contract that is significant in view of the insurer's interests, is provided for by law or in the contract, and led to the event occurring;
- in other cases provided for by law.
The third ground is the most frequently used and the most frequently disputed. It requires three things at once: the obligation must be provided for, the failure must be significant, and it must have led to the damage. A breach in itself, with no connection to the accident, is not enough under the law.
Circumstances inaccurately declared when the policy was taken out
If, when the contract was concluded, you knowingly concealed or inaccurately declared a material circumstance, the insurer may refuse in full or in part only if that circumstance contributed to the event occurring. If it affected only the extent of the damage, the insurer cannot refuse, but can only reduce the compensation in proportion to the premium (Art. 363(4) of the Insurance Code).
Failure to take measures to protect the car
The insured must take measures to protect the property and follow the insurer's instructions (Art. 395(1) of the Insurance Code). In the event of a failure, the insurer may refuse only if the event is a consequence of that failure and the contract expressly provides for it as a ground for refusal. If it does not, the insurer may only reduce the compensation. If there is no causal link with the damage, full compensation is due (Art. 395(4) and (5)).
Late notification
By law, you notify the insurer within 7 working days of becoming aware of the event, unless the contract provides for another appropriate period, which may not be shorter than 3 working days or, for theft, shorter than 24 hours (Art. 403(1) and (2) of the Insurance Code). Delay is a ground for refusal only if it was intended to prevent the insurer from establishing the circumstances, or made that impossible. If the insurer learned of the event in some other way, it cannot refuse on that ground (Art. 403(4) and (5)).
Exclusions in the general terms: which are the most common?
In addition to the grounds for refusal, the general terms contain exclusions: risks that are not covered at all. Typically these are:
- wear and tear, corrosion, mechanical or electrical failure not caused by an external event;
- damage to tyres and wheel rims only, where no other parts are affected;
- driving after consuming alcohol or drugs, or without a valid driving licence;
- theft where the keys or the registration certificate were left in the car;
- damage while taking part in races or when the car is used for purposes other than those declared (for example as a taxi without declaring it);
- old damage not declared at the inspection.
An exclusion must be clearly worded and must form part of the contract handed to you when it was concluded. In consumer contracts, unclear clauses are interpreted in favour of the consumer, and unfair terms are void under the Consumer Protection Act (Закон за защита на потребителите). Whether a particular clause withstands such scrutiny is a matter of assessing the specific text and also depends on the court.
From our practice: Where the refusal is based on alcohol or driving without a licence, look carefully at how the clause is worded: as an exclusion from cover or as an obligation of the insured. This determines whether the insurer has to prove a link between the breach and the damage.
How is Casco compensation determined?
The basic rule is that the insurer pays compensation equal to the damage actually suffered as at the day of the event, but no more than the sum insured (Art. 386 of the Insurance Code). Actual value is the amount for which other property of the same kind and quality can be bought, and replacement value is the cost of replacing it with new property, without depreciation (Art. 400(1) and (2)). Unless otherwise agreed, the sum insured is deemed to have been set at actual value (Art. 400(3)).
Methods of compensation
The general terms usually provide for several options. Which applies depends on the policy, the age of the car and your choice when you took out the policy:
| Method | How it works | What to watch out for |
|---|---|---|
| Repair at an authorised dealer | The insurer pays the authorised garage's invoice | Usually only for new or fairly new cars; higher premium |
| Repair at a partner garage | The insurer assigns the repair to a garage it has a contract with | Quality and timing of the repair; parts new or non-original |
| Expert valuation (calculation) | An amount based on the insurer's calculation is paid | Prices of parts and labour, depreciation; the most common source of disputes |
| Restoration in kind | The insurer arranges the repair with your consent | Deadline for assigning the work and a reasonable period for the repair |
With the insured's consent, the insurer may make good the damage in kind (Art. 406 of the Insurance Code). In that case, within the deadline for its decision it must assign the repair in writing to an external contractor, and the repair is carried out within a reasonable period, unless a specific one was agreed (Art. 108(7)).
Underinsurance
If the sum insured is lower than the actual value of the car, by law the full amount of the damage is compensated up to the sum insured. A proportional reduction applies only if the contract expressly provides for it (Art. 389 of the Insurance Code). Check this in the general terms before you accept reduced compensation. The mechanism is described in detail in our article on home insurance and underinsurance.
Total loss: when the car is "not worth" repairing
Casco general terms usually define a total loss as a situation in which the cost of repair exceeds a certain percentage of the car's actual value as at the date of the event. The percentage differs between insurers and is set out in the general terms. In the case of a total loss, the actual value of the car is usually paid, less the value of the salvageable parts, or the insurer takes the wreck in return for full payment. The car often has to be deregistered.
There are usually two disputes in total loss cases: whether it really is a total loss (if repair would be to your advantage), and what the market value of the car was before the event. On both questions, evidence is decisive: offers for similar cars, service history, equipment and, in court, expert evidence.
Car theft under Casco
Casco covers theft if that risk is included. The general terms usually require:
- immediate notification of the police and the insurer (for theft, the law allows a contractual period of 24 hours, Art. 403(2) of the Insurance Code);
- handing over all the keys and the registration certificate;
- a police document confirming that a case file or pre-trial proceedings have been opened;
- in some cases, waiting for a set period before payment, to see whether the car is found.
If the car is found after payment, the insured must transfer ownership to the insurer or, if they wish to keep it, return the compensation received and reasonable costs (Art. 405(3) of the Insurance Code).
Deadlines: when must the insurer pay?
| Stage | Deadline | Legal basis |
|---|---|---|
| Notifying the damage (unless the contract provides otherwise) | 7 working days | Art. 403(1) of the Insurance Code |
| Request for additional evidence | within 45 days of the documents submitted | Art. 106(4) of the Insurance Code |
| Decision once all evidence is submitted | within 15 working days | Art. 108(1) of the Insurance Code |
| Final deadline if not all evidence has been submitted | 6 months from the claim | Art. 108(2) of the Insurance Code |
| Reasons given for the amount on a complaint | 7 days | Art. 108(6) of the Insurance Code |
| Limitation period for a Casco claim | 3 years from the event | Art. 378(1) of the Insurance Code |
Casco is one of the types of insurance for which the insurer must decide within 15 working days of all the evidence being submitted (Art. 108(1) of the Insurance Code). Once the deadline has passed, it owes statutory default interest (Art. 405 and Art. 409). The insurer may not require evidence that you cannot obtain or that is clearly irrelevant (Art. 106(5)).
The limitation period is suspended from the submission of the claim until the insurer's decision is received or, if earlier, until the maximum deadline for the decision expires (Art. 378(9) of the Insurance Code). After that, it continues to run. Do not assume that negotiations after a refusal stop it in themselves.
How to challenge the valuation: step by step
- Ask for the claim file. Request in writing the calculation, the inspection photos, the expert reports and the reasons for the amount. If you complain about the amount, the insurer must give you a written factual and legal justification within 7 days (Art. 108(6) of the Insurance Code).
- Check the calculation line by line. Missing parts, parts marked "repair" instead of "replace", understated labour hours, prices of non-original parts, depreciation applied.
- Get an independent valuation or quote. A garage quote and an opinion from an independent motor assessor are the strongest arguments in support of your objection.
- Submit a written objection. Cite the specific clauses of the general terms and Art. 386 of the Insurance Code, attach the quotes and ask for a further inspection.
- Do not repair before documenting. If the insurer has not inspected hidden damage, ask for a further inspection after dismantling.
- Complain to the Financial Supervision Commission (Комисия за финансов надзор, КФН). The FSC inspects the insurer and can impose measures, but it cannot order it to pay.
- Conciliation procedure. The sectoral conciliation committee at the Consumer Protection Commission (Комисия за защита на потребителите) examines insurance disputes. The procedure is free, but its decision is not binding on the insurer.
- A claim in court. It must be brought within the three-year limitation period.
A case against the insurer: the role of the motor-engineering expert
In court, the decisive evidence is usually the court-appointed motor-engineering expert report. The expert establishes which damage resulted from the event, whether parts can be repaired or must be replaced, and the cost of the necessary repair. In practice, the courts usually set compensation by the average market prices of the repair as at the date of the event, not by the insurer's internal calculation tables. Exactly how the amount will be calculated under a particular policy depends on the agreed terms and on the court.
If the claim succeeds, the insurer owes the compensation, statutory interest and costs. That is why it is important, from the moment you make the claim, to document everything that may later help the expert: photos before the repair, the parts removed, the invoices. If you are looking for someone to represent you in court, see what questions to ask your lawyer.
Casco and the driver at fault: recourse and the uncovered part
When the damage was caused by another driver, the Casco insurer pays and is subrogated to your rights against the person responsible and their motor third-party liability insurer (Art. 410 and 411 of the Insurance Code). You can claim the excess and any uncovered damage yourself from the at-fault driver's insurer. If the damage was caused by an unmarked pothole or a fallen tree, the insurer recovers the amount from the municipality or the Road Infrastructure Agency (Агенция „Пътна инфраструктура“, АПИ); see our articles on an accident caused by a pothole and on a fallen tree or branch on your car.
If the damage occurred while travelling abroad, check whether your policy provides cover in that country. We explain how to claim compensation from the insurer of a foreign driver at fault in our article a car accident abroad and the Green Card. You will find more about our practice as insurance lawyers in Sofia.
Frequently Asked Questions (FAQ)
When can the insurer refuse to pay under Casco?
Only in the cases under Art. 408(1) of the Insurance Code: intentionally causing the event, a significant failure to perform a contractual obligation that led to the event, and other cases provided for by law. Separately, the general terms may exclude certain risks from cover. The refusal must give reasons.
How quickly must I be paid under Casco?
The insurer must decide within 15 working days of all the evidence being submitted (Art. 108(1) of the Insurance Code) and, if you have not submitted it all, no later than 6 months from the claim. Once the deadline has passed, it owes statutory interest.
Can I refuse repair at a partner garage and ask for money instead?
It depends on the policy. If you chose compensation by repair at a partner garage, the insurer will as a rule insist on it. However, restoration in kind requires your consent (Art. 406 of the Insurance Code), so read what you signed. Similar questions about the choice of compensation method also arise with home insurance.
The insurer valued the damage too low. What should I do?
Ask for the calculation and a written justification of the amount, which the insurer owes within 7 days of a complaint (Art. 108(6) of the Insurance Code). Get a garage quote and an independent opinion and submit an objection. If that does not help, the conciliation procedure and a court case with a motor-engineering expert remain. We explain how to choose someone to represent you in our article how to choose a good lawyer.
What is a total loss?
It is a situation in which the repair exceeds a certain percentage of the car's actual value, as set out in the general terms. The actual value of the car is then usually paid, less the salvageable parts. The dispute is most often about the market value before the event.
Can the insurer refuse because I notified it late?
Only if the delay was intended to prevent the circumstances from being established or made that impossible (Art. 403(4) of the Insurance Code). If the insurer learned of the event in some other way, it cannot refuse on that ground.
Does Casco cover damage from a pothole?
Usually yes, if the policy covers the "road accident" risk and there is no exclusion for the specific parts, for example for tyres and rims only. The insurer then recovers the amount from the municipality or the Road Infrastructure Agency. We explain how recourse works in our article on potholes and compensation for your car.
How long do I have to sue the Casco insurer?
The limitation period is three years from the date of the event (Art. 378(1) of the Insurance Code). It is suspended from the submission of the claim until the insurer's decision, but not for the whole duration of any negotiations that follow.
Can the FSC order the insurer to pay me?
No. The Financial Supervision Commission can inspect the insurer and impose sanctions on it, but it does not award compensation. To compel payment you need a court judgment or a settlement.
Does Casco cover an accident abroad?
Yes, if the policy provides territorial cover for that country. Where a foreign driver is at fault, you can choose between your Casco and a claim against their insurer. Read more in our article a car accident abroad and the Green Card.
What should I do if a branch falls on my car?
Make a Casco claim if your policy covers that risk. If the branch came from a poorly maintained municipal tree, the insurer will recover the amount from the municipality, and without Casco you can bring the claim yourself. See our article on a fallen tree or branch on your car.
How can we help you?
Casco disputes are most often decided by the details: the wording of the clause the insurer relies on, what the inspection report at the start of the policy says, and the quality of the evidence of the amount of damage. So do not accept a refusal or a low valuation before you have reviewed the policy and the general terms.
Mechkova & Dimitrova Law Firm will review the refusal and the calculation, prepare the objection and, if necessary, represent you in court, including when formulating the questions for the motor-engineering expert. The information in this article is general and does not guarantee a particular result. Contact us with your policy and the insurer's refusal.
