The Superior Tribunal of Justice (STJ, Brazil’s highest court for non-constitutional matters) announced last Friday (December 14th) 10 consolidated interpretations regarding damage insurance claims. They are:

1) In case of a total loss due to fire, without the possibility of quantifying the loss, the full policy limit will be owed.

2) The simple delay in paying the premium does not automatically invalidate the policy. Instead, the insurer must first formally notify the insured of the default.

3) The insurer has the right to demand reimbursement of the damages suffered by the insured after paying the indemnity, through subrogation in the rights previously held by the insured, pursuant to Article 786 of the Civil Code and Súmula (statement of jurisprudence constante) 188 from the Supreme Court.

4) After paying the indemnity due to loss of baggage or cargo by an airline company, the insurer is subrogated in the rights of the insured, and can within the applicable statutory limitation period seek reimbursement, up to the limit paid to the insured.

5) In suits to recover filed by the insurer against the causer of indemnified damage, the application of arrears interest starts to run as of the date of payment of the indemnity, not the date of service of process.

6) In vehicle insurance, the inflation adjustment of the value of the insurance coverage starts to accrue as of the date of signing the contract, until the effective payment of the indemnity.

7) It is not abusive to insert a clause in vehicle insurance policies by which, in cases of total loss or theft of the vehicle, the insurer pays the market value of the vehicle.

8) The claim for indemnity submitted to the insurer suspends the running of the time-bar until the insured is notified of the decision (Súmula 229 from the STJ).

9) In vehicle insurance, it is lawful to include a clause excluding coverage based on proof by the insurer that the driver of the insured vehicle was drunk or under the influence of drugs.

10) In insurance contracts covering theft or robbery, the duty to indemnify does not apply to cases of embezzlement or misappropriation, since those crimes have restrictive interpretation.