Duty of disclosure

When you apply for insurance, the insurance company will rely on the information it receives to decide on the terms and conditions for your insurance.

The insurance company will ask for certain particulars and you must provide complete, up to date and relevant information in response to any questions asked.

You must also tell the insurance company of any information that you may have that will be material to the risk you wish to insure. This includes any information that would influence the decision of a prudent insurer to decide whether to accept the insurance and if so, the terms that will apply including the level of premium, limitations on cover, excess or any other special requirements.

If in doubt, you should give information to the insurer for consideration.

The disclosure duty exists not only when the insurance is taken out but also at each renewal of the policy and even during the currency of the policy.

Examples of relevant facts bout you, your partner or others insured under your policy, include:

All insurances

Criminal convictions, subject to the Criminal Records (Clean Slate) Act 2004
If any insurer has declined or refused previous insurance or applied any special terms
Previous losses, accidents, thefts of property or claims

Motor insurances

Driving offences and infringements (for motor insurance)
Any use of the vehicle for business purposes
Any modifications to the vehicle
Details of the drivers

Home and contents insurances

If tenanted/used by tenant
If unoccupied beyond a period allowed in the policy
If undergoing alterations, additions or structural changes
If used for business purposes
If the property is exposed to any particular risk due to its location (eg flood, landslip)
Whether there are any security measures in place

If you fail to disclose material information, you have breached your duty of disclosure and the insurer may, depending on the date the information should have been provided

Refuse to pay part or all of a claim you make
Treat the policy as having never existed from the start or renewal date of the policy

In addition, where the non-disclosure was deliberate, the insurer could refuse to provide any further insurance and this may mean you are unable to get future insurance from other insurers

Proper disclosure is extremely important in enabling an insurer to provide the right cover at the right price. If you are unsure about whether an issue should be disclosed or not, ask your insurer.

See more on the duty of disclosure in the Fair Insurance Code.

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