Sometimes when adding or changing something to an insurance policy we might try and bend the truth because we think it might get us a lower monthly premium or save a buck here or there, however non-disclosure on an insurance policy could in fact result in a rejection of your claim. In this article we would like to draw your attention to the consequences of not disclosing all material facts at the time of taking out your insurance policy. The following are common points that are often not disclosed, resulting in a claim being deemed invalid.
- Insurable Interest – A policy holder needs to suffer a financial loss in the event of a claim. If you can prove this then insurable interest usually exists. You cannot insure a friend’s car that is registered in their name that they have lent to you. The correct way would be for the friend (registered owner) to insure it, disclose the fact that you will be the regular driver and pay the premium based on this scenario.
- Insolvency or judgements – If you have been declared insolvent or have judgements against you, this needs to be disclosed at the time of taking out a policy. If you already have a policy and you are subsequently declared insolvent or a judgement is issued against you, your obligation is to disclose this to your current insurer, failing which you may once again invalidate future claims due to non-disclosure. This is deemed a material change in facts, and as such needs to be disclosed.
- Regular driver of a vehicle – An insurance premium is calculated based on more than just the age and experience of the regular driver, so it is important to disclose the correct information regarding the driver. Click here to view our previous #BrokerTipTuesday for more information on how insurers determine rates for particular vehicles: https://www.linkedin.com/posts/insurance-zone24_brokertiptuesday-insurancebroker-children-activity-6706448199642566657-ETTt
- Previous claims – An insurers decision on whether to insure you or not is based on many facts, one of them being the correct disclosure of previous losses or claims. Please note that even if you had a loss and did not claim for it, this needs to be disclosed. Failing to disclose the correct details about previous claims may invalidate any future claims, as it can be argued that had the insurer known about all of your claims they may not have offered to insure you.
These are just a few examples of what you need to be aware of when taking a policy. If you would like to know more, please contact your personal insurance broker for more information.