Facts
On 25 July 2006 and 12 September 2002, A. and B. (the appellants) concluded household and private liability insurance contracts with X. Insurance Company AG (the respondent). The contracts referred to the respondent's general terms and conditions (GTC). In November 2006, the respondent informed the appellants that due to an order from the Federal Office of Private Insurance, higher liability limits, adjusted deductibles and increased premium rates would apply as of 1 January 2007. The appellants then terminated the contracts, which the respondent rejected, citing the exclusion of the right to terminate in Clause 4 Paragraph 2 of its GTC. The Federal Supreme Court concluded that this clause was unusual and that the appellants had a right to terminate the contracts.Considerations
The Federal Supreme Court first examined whether the civil law appeal was admissible. It affirmed this, as a legal question of fundamental importance was at issue. This concerned the question of whether the policyholder has a right of termination if a federal authority prescribes a change in premiums, deductibles, compensation limits or the scope of coverage, and the insurance company then adapts the contract accordingly.
On the merits, the Federal Supreme Court stated that Clause 4 Para. 2 of the respondent's 2005 GTC, which excludes the policyholders' right of termination in such cases, is to be qualified as unusual. The respondent had not expressly drawn the appellants' attention to…