Act on Natural Damage Insurance

Translation from Norwegian: ACT NO. 70, 16 June 1989.

Act on Natural Damage Insurance as amended, most recently by Act no. 98 of 17 December 2004, into force on 1 January 2005

See Act no. 7 of 25 March 1994 and Act no. 69 of 16 June 1989.

Section 1

Property in Norway that is insured against fire is also insured against damage caused by natural events, provided the damage to the item in question is not covered by other insurance. Natural damage is understood to be damage directly caused by a natural event such as landslide, avalanche, storm, floods, storm surge, earthquake or volcanic eruption. If the insured item is a dwelling or holiday home, the insurance also covers natural damage to garden, garden accoutrements or farmyard not exceeding 5 decar, including that part of any access road lying within the garden, garden accoutrements or farmyard.

The company is nevertheless not liable for natural damage to forest or standing crops, goods in transit, motor vehicle or motor vehicle trailer, aircraft, ship or small boat as well as their contents, fishing gear on vessels or in the sea, equipment in the sea for production of fish, fish in cage, net or dam, equipment for extracting oil, gas or other natural resources on the seabed. Moreover, the company is not liable for loss or damage solely effecting aerials or signs etc. The King may decide that other items shall be wholly or partly exempted from natural damage insurance under this paragraph.

Natural damage indemnity may be reduced or voided if the occurrence or extent of the damage is due wholly or in part to weak construction in relation to the stress to which the item can be expected to be exposed, or to poor maintenance or supervision, or where the claimant can be blamed for failing to prevent the damage or to limit its extent. A decision to reduce or void indemnity shall give weight to the claimant’s capacity to realise what requirements have to be made, his opportunity to remedy the defect and the circumstances in general. Indemnity shall not be reduced if the claimant is only slightly to blame.

Where an order banning building and division of property has been issued under the Natural Damage Act section 22, indemnity shall not be given for damage to structures that have subsequently been erected in the area in question, or for chattels present in the structure when the damage is of the nature referred to in the order.

Section 2

If there is doubt as to the presence of natural damage under section 1 first paragraph or as to whether the conditions for reduction or refusal of indemnity under section 1 third paragraph are present, the insurance company or the insured may submit the question to the Appeals Board of the National Fund for Natural Disaster Assistance under the rules of section 18 of the Natural Damage Act. The company shall notify the insured of his rights pursuant to these provisions. The decision of the Appeals Board is final.

Should the insurance company find when handling a claim that an area is particularly exposed to avalanches, landslides or other natural events, cf. section 20 of the Natural Damage Act, the company shall notify the municipality concerned as soon as possible.

Section 3

The insured shall pay an excess, fixed by the King, for any natural damage event that is covered by the natural damage insurance.

The insurance companies’ aggregate liability in the event of a single natural disaster is limited to an amount fixed by the King.

It may be agreed in connection with natural damage insurance that the company’s liability for salvage costs pursuant to the Insurance Contracts Act (no. 69 of 16 June 1989) section 6-4 shall be limited to the value of the insured item.

If there is doubt as to whether one or more natural disasters have occurred, the insurance company or the insured may submit the matter to the Appeals Board of the National Fund for Natural Disaster Assistance pursuant to the rules of the Natural Damage Act section 18. The company shall notify the insured of his rights pursuant to this paragraph. The Appeal Board’s decision is final.

If the stipulated limit is exceeded, the insured must bear a proportional reduction of the indemnities.

Section 4

All non-life insurance companies which indemnify natural damage shall be members of a common claims pool. This applies regardless of where such company has its head office.

The claims pool liaises between the insurance industry and the Norwegian National Fund for Natural Damage Assistance. The claims pool distributes compensation for natural damage between the companies. Distribution is based on insured values or insurance premiums as further determined by the King.

The King establishes further instructions for the activities of the claims pool.

Section 4 a

A policyholder who enters into a fire insurance contract with an insurance company that is not a member of the Norwegian Natural Perils Pool shall pay a fee to the pool. The fee is determined on the basis of the sum of the fire insurance coverage. The King may lay down further rules concerning the fee.

Whoever enters into a fire insurance contract with a company as mentioned in the first paragraph is obliged to notify the Natural Perils Pool thereof in accordance with provisions established by the King. The Natural Perils Pool may also request such information itself. Whoever wilfully or through negligence violates this provision or provisions issued in pursuance of this Act shall be punished by fines.

Section 5

The provisions of this Act or of regulations issued pursuant to this Act may not be derogated from to the detriment of the insured.

The rules of section 1 are mandatory, even where it is agreed that the law of another country shall regulate the insurance relationship.

Section 6

This Act enters into force on the date decided by the King