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    • Posted by: Insurance Claims
    • Category: facts about insurance claims

    Up until 2013, you had to volunteer information to your insurance company about anything that you might have thought would make the insurance company think twice about insuring you and your family.  This placed the potential policyholder in a very difficult position, not least he was not sure whether or not he should volunteer information.  Indeed, over the past 30/40 years, we have seen insurance companies repudiate claims because the policyholder had not volunteered information that the insurers suggested would have altered their perception of the risk.  As from 6th April 2013, your insurer must ask every question that it wishes to receive an answer to, leaving the onus of questions to be answered and questions not to be answered entirely with the insurance company.  In other words, you do not have to think what should be volunteered and what shouldn’t be volunteered.  If an insurance company does not ask a question then you do not have to volunteer any such information.  The Law covering these relevant questions falls under the Consumer Insurance (Disclosure and Representations) Act 2012.

    a policy holder putting information into his insurance documents

    It is of paramount importance that you must answer the insurer’s questions with absolute honesty because the whole essence of an insurance contract is based on the Latin phrase ‘Uberrima fides’.  This means ‘ultimate good faith’ (literally most abundant faith).  This is a legal doctrine which governs every insurance contract and, in short, means that every party to an insurance contract must deal in good faith.  Should it be proved that one of the parties did not adhere to this ‘ultimate good faith’ rule, then the contract can be seen as broken.

    Making an application for an insurance policy

    It is exceptionally important that you see the insurance proposal form before it is forwarded to the insurance company by your insurance broker.  Over the years there have been countless occasions when the insurance company has spotted a dis-honest (or let’s be kind and say ‘mistaken!’) statement on the form resulting in the policyholder trying to convince us that their broker filled out the form and signed it on their behalf.  Always ensure that the signature on a proposal form is yours and you sign it only after you have carefully read every statement upon it.  By way of an example, if you are asked whether you have had, say a burglary in the past (whether or not you were insured) or whether any insurance company has ever refused you insurance before, your answer must be honest.  Be mindful that insurance companies have access to various databases detailing claims going back 15/20 years or more.

    Material disclosure before the Consumer Insurance (Disclosure and Representations) Act 2012 came into force you had to disclose all information that fell for consideration as to whether they wanted your business or that if they did want the business they could charge an extra premium to allow for what they considered an extra risk.  As mentioned above, it fell to the proposer to disclose whether he/she or anybody else in the household had any convictions for offences directly related to home insurance, for example, arson or theft.  Hopefully, you will agree that these are undoubtedly material facts.  However, since the new legislation, you do not have to answer these questions unless specifically asked.

    But what happens if I do make a mistake on the Proposal Form and it’s an obvious accident?

    If your insurer would not have entered into the contract had they had known specific information about you or the situation because a question was answered incorrectly on the proposal form, then they are at liberty to end that contract and they have to return all of the premiums you have paid.  Some examples that might fall under this category are telling your insurance company that you have £25,000 worth of jewellery at home when in point of fact you have under-valued it and it gets stolen and you put in a claim for £75,000.  There are ample insurance companies that are not interested in taking on risks for jewellery over £25,000 and this situation can involve a non-payment of your claim and a return of your premium.

    Also, if there have been any changes in circumstances of your lifestyle, perhaps you have moved home or a member of your household has been accused and convicted of a crime (this also includes driving without due care and attention should this involve a fatality) your insurers may site this as a material disclosure.

    Salmon Assessors can help with your insurance claim. Call us today on: 020 8346 6060 for free insurance claim advice.