Krista (full name known to the editorial team) sold her apartment in Tallinn in March 2024. But on the last day of October this year, she received a letter from Swedbank P&C Insurance demanding a payment of €2,500 related to water damage that occurred nearly two years earlier, on December 17, 2023 in the apartment below hers.

Water leaks weren't unexpected in the top-floor apartment, which had been built into the attic of a prewar building. The roof had caused repeated issues due to poor insulation of the low attic, which led to condensation forming under the metal roofing in certain weather conditions. This moisture would occasionally show up as stains on the ceiling.

"The roof and attic were redone several times, the housing association covered the costs and the problem seemed to get better, but it never went away. Twice we had painters come to fix the water stains and make the ceiling look nice again," Krista's partner recalled.

Krista also remembers the specific incident behind the insurance company's claim. After the downstairs neighbor reported water damage, representatives from the housing association inspected her apartment, but found no sign of a leak or any trace of moisture. Photos taken by the neighbor showed damage near an exterior wall and corner, whereas Krista's bathroom was located in the middle of the apartment — nowhere near the affected area.

When Swedbank P&C Insurance sent Krista the claim this October, she asked the insurer to explain why her former apartment was only now, almost two years after the incident, being named as the source of the damage and why she was being held liable.

The response from Swedbank Insurance was unequivocal: since Krista's former apartment was located directly above the damaged unit and on the top floor of the building, "it can be stated with certainty that the water damage originated from the apartment you owned."

Krista found this explanation insufficient. She wrote back, pointing out that any damage visible in the neighbor's photos should also have been visible in her own apartment, yet she was never informed of any such findings. Even when the housing association inspected her unit five days after the downstairs damage occurred, nothing unusual was observed.

Krista's main concern, however, was the timing of the claim. Throughout the period she owned the apartment, it had been insured with Ergo and the policy included coverage for damage caused to other units. In fact, the policy remained in effect for six months beyond her final insured month, ending in September of the previous year. Swedbank's claim, on the other hand, wasn't filed until nearly two years after the incident.

"This exceptionally long delay has made it impossible to insure myself against such claims, as I haven't owned the apartment for over a year and a half," Krista wrote to the insurance company.

Insurer sees no fault in late claim

The insurance company did not withdraw its claim. A representative from Swedbank P&C Insurance stated that under the law, an insurer has the right to file a recourse claim within three years from the moment the damage occurred and the liable party became known.

"Swedbank P&C Insurance AS has followed the legally prescribed deadlines when filing the recourse claim. If you are dissatisfied with the special terms set by your own insurer, you have the right to dispute their decision to deny coverage," the company wrote to Krista.

Sandra Dõba, head of home insurance at Swedbank, told ERR that a claim against the party responsible for the damage is transferred to the insurer only after compensation has been paid to the injured party. She confirmed that insurers have up to three years to file such claims.

"The timing of a recourse claim depends on the insurer's internal procedures, as our main goal is not to pursue recourse but to provide the fastest possible claims service to our clients," Dõba explained.

The time it takes to file a claim depends on the specific circumstances of the case, she added.

"In practice, there are cases where the full extent or cause of the damage is only determined through later expert assessments or additional work. In general, recourse claims are filed between one and a half to two years after the incident," said Dõba. "The insurer does not delay filing claims without good reason and always aims to complete the process as quickly as possible."

Dõba also noted that while insurers strive to process recourse claims promptly, it's still possible that some are filed close to the legal expiration deadline.

"There is nothing improper in this approach, as the statute of limitations for filing such claims is set by law. Filing closer to the deadline is a risk the insurer assumes, since proving the facts of the claim can become more difficult over time," she said.

Allegedly responsible party expected to prove their innocence

According to Dõba, cases where recourse claims are filed a year, two years or even the full three years later typically stem from the damage's cause being identified only after the fact. Apartment owners can protect themselves from such claims through home insurance that includes liability coverage.

"Generally, an insurance policy covers damages that occurred during the coverage period and the fact that the policy was later terminated doesn't mean there was no coverage at the time the damage occurred," Dõba explained. "It's always wise for both the party suffering the damage and the owner of the apartment where the damage may have originated to document the incident in writing and photograph the leak site. Involving a housing association representative can also be helpful."

Krista acknowledged that the duration and terms of her insurance coverage were likely spelled out in fine print, but she hadn't paid much attention, as she didn't expect to need coverage for a claim more than a year after the policy ended.

She asked Swedbank how it had been proven that the water came from her former apartment. The company responded: "Courts have held that if it is proven that water entered from the ceiling or above and caused damage, then the burden of proof shifts — the owner of the upstairs apartment must prove that the water did not originate from their apartment or that someone else is liable."

Swedbank's representative added that a mere verbal claim of "everything is dry, nothing happened" does not qualify as sufficient evidence.

Krista still believes it's more likely the water came from higher up, given the building's history of recurring roof issues. Unfortunately, they can no longer prove this, as they no longer own the apartment, and it has since undergone a complete renovation.

"Then again, the water might have come from the neighboring unit whose owner eventually bought our apartment, but no claim was made against them," Krista's partner noted.

Ergo: Impossible to collect evidence years later

In Ergo's home insurance policies, including standard terms for liability coverage, the typical window for filing claims is one year after the end of the insurance period, said Aune Pärn, product manager for liability insurance at Ergo.

"If necessary, we've been willing to extend the claim period to three years. To do this, the policyholder must request it before signing the insurance contract," Pärn added.

She explained that Ergo has an agreement in place: if a policyholder reports damage or a potential issue in a timely manner and the insurer has been able to assess the potential extent of the loss, they will compensate valid claims filed later, provided the legal statute of limitations hasn't expired.

Pärn cited the Law of Obligations Act, which stipulates that any circumstance that could result in a claim or insurance event must be reported to the insurer within one week of the policyholder becoming aware of it. Early notification enables a swift response and fair claims handling.

If an insurer is notified years after the fact, they can no longer gather evidence or determine what actually happened, Pärn noted. In such cases, they may be unable to confirm whether any damage occurred at all or to what extent.

She added that when an insurance company receives a recourse claim from another insurer, it typically contains limited information. For example, in water damage cases, the property insurer investigates the affected unit only from its own policyholder's perspective — that is, they inspect the apartment where the damage occurred in order to determine coverage under the property insurance policy.

"As a result, they assess the condition of the damaged apartment and the extent of the loss primarily from the standpoint of their own coverage. Possible damage caused to neighboring apartments is usually not evaluated, or if it is, only superficially," said Pärn.

In Krista's case, the housing association initially did not consider her unit to be the source of the damage, which now leaves her without any retroactive basis for defense.

Cases like this typically fall outside the scope of the Consumer Protection and Technical Regulatory Authority. Veiko Kopamees, head of the secretariat for the authority's Consumer Disputes Committee, explained that claims involving compensation, especially those brought by insurers against third parties, are generally not handled as consumer disputes, as they don't arise from contractual relationships governed by consumer law.

"Without knowing all the details, it's impossible to assess who is responsible and to what extent for the alleged damage. In general, the statute of limitations varies — it may be three, five or even ten years, depending on the nature of the claim," Kopamees said of the specific case. He added that in a dispute between parties, the claimant bears the burden of substantiating and proving their claim.

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