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Lois Avery

Don’t fall into the ‘non-disclosure’ insurance trap

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When you renew or take out home insurance, make sure you tell your insurer everything you think could affect the policy, because slip-ups could be costly.

Insurance policy

When taking out or renewing home cover, be careful when filling in the form so you avoid ‘non-disclosure.’

When you taking out an insurance policy, the law states you have to disclose “all material facts” - those which would influence whether the insurer offers cover and on what terms.

Non‐disclosure is when you fail to reveal a material fact when applying for, or renewing, insurance. An example of this is not telling your insurer about a new extension which increase the value of the property, or if you have a criminal conviction.

Another home insurance mistake to watch out for is ‘misrepresentation’. This is when you make an incorrect statement. An example is you stating that you have an advanced security system, when you only have a basic burglar alarm.

Although in many cases non-disclosure is innocent; you might simply have forgotten to tell your insurer something or think it’s not relevant; it could result in a rejected claim.

Are you telling your insurer everything?

Homeprotect chief executive, David Walker, says insurance companies are often to blame for assuming too much knowledge on behalf of their customers and not asking the right questions during the application.

He said: “We want to educate consumers so they understand the risks and implications of non-disclosure of information, which may seem trivial to them but can actually invalidate their household insurance policy leaving them exposed when it comes to crunch time. 

“Most of the time people get away with it, but they should understand that their homes may be at risk if they submit inaccurate applications for household insurance.”

Examples of non-disclosure

A man reading

Common areas where policy holders are likely to non-disclose without even realising include:  

  • having or taking in a tenant without informing the insurer

  • carrying out renovation work or adding an extension to your property without telling your insurer

  • not revealing that you have had insurance refused, cancelled or had special terms imposed

  • not disclosing that you have had a liability claim made against you  

The simple message is, if in doubt inform your insurer so you have peace of mind and certainty that you’re covered. So for example, even if you change the lock type of the property or security system, then drop the insurer a call to let them know.

Walker added: “There may be instances a buyer may feel a change in circumstances is not worth mentioning to the insurer, but they should understand that whatever the situation, the risk to the customer is the same.

Their policy may no longer be valid and when it comes to making a claim, it could be reduced or refused based on the omission of the information.”

What if the information is not related to a claim?

If you were making a claim for burglary and had previously told your insurer you had smoke alarms when you didn’t, then the claim should still be approved.

Information unrelated to the claim, if it’s less serious, will often not be an issue, according to the Association of British insurers, although it warns care should be taken to get the information right.

A spokesman for the ABI said: “If an omission is not relevant to the situation of the claim, it should not affect the claim.

If someone is burgled but they don’t have a smoke alarm, this would not affect their insurance claim. A smoke alarm, unless the burglar started a fire, would not have prevented the burglary from happening and nor does it cause one."

“On the other hand, if a policy holder left their home unlocked, windows wide open and unattended, an insurer may see this as the policy holder being negligent and not taking reasonable care to protect their home, and they may not pay the claimant.”

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