Osti top pattern

Accurate information when taking out short-term insurance (2009)

Osti top banner
You are here:

Consumers need to disclose true and accurate information when taking out short-term insurance

Consumers need to ensure that they disclose true and accurate information to their insurer when taking out insurance as insurers are entitled to full and frank disclosure of all facts material to its assessment of the risk and the premium charged. The Ombudsman for Short-Term Insurance, Brian Martin says if you are unsure of your facts, rather ask for more time from your insurer to verify the facts or advise them that you are unsure.

Consumers also need to ensure that they advise their insurer or broker if circumstances have changed since the inception of the policy, for example, alterations have been made to your home or you have had a change of address. An insurer relies upon the information furnished and bases its assessment on the truth and accuracy of that information. "If you have had prior claims or a judgement against you, make sure that you disclose this information. Rather adopt the policy of providing too much information then too little information", says Brian.

The Office recently dealt with a complaint where the insured had telephoned an insurance company enquiring about insurance cover for his vehicle and contents of his house. Based upon the responses given to a number of questions, the insurer provided a quotation which was accepted by the insured. A few months later the insured filed a claim for damage to his motor vehicle which had been involved in an accident in a parking garage. The insurer rejected liability for the insured's claim on the grounds of non-disclosure. The insured had submitted four accident claims against his previous insurer within a short period of time and which were of significant value. At the time that the insured took out the cover, he was asked whether in the previous five years there had been claims made against his vehicle, to which he only acknowledged one claim. Had the insured provided proper disclosure to his insurer, they would have declined the risk due to his history of claims. "In this instance, we agreed with the insurer's decision that they would declare the policy void from inception, but that they needed to refund all the insurance premiums that had been paid by the insured. The insured knew that he had filed a significant number of claims within a short period of time against his previous insurer and that this information would certainly have affected the insurers assessment of the risk", says Brian.

view as document