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Disclosure of all information to Insurers

Disclosure of all information to Insurers

Newstalk discussion – 17 May 2010

 

 

On Motormouth on Newstalk 106 – 108fm, Monday 17th May 2010, we had a discussion about the importance of giving full disclosure to an insurance company when getting cover or on renewal or even during cover.

 

A contract for insurance, unlike most, is governed by the rules of “uberrimae fidei” which means in the utmost good faith.  It is in many ways the direct opposite of the legal expression “caveat emptor” – let the buyer beware. 

 

When dealing with an insurance company, a  proposer/policy holder must give all information to the insurance company that is relevant to the risk that the insurer is accepting.  This rule is there because the proposer has all the information and even with a long proposal form the insurer cannot ask all the relevant questions, so the company is accepting the policy holder in the utmost good faith, based on what the proposer/policy holder says.

 

This means any material fact that may affect the risk or the premium that is likely to be charged and in particular whether or not the insurer would take the customer on in the first place must be fully disclosed to the insurance company. 

 

We discussed examples of this, including disclosing penalty points in full and in detail to the insurance company, any  previous convictions for motoring or other offences that might affect the risk must also be disclosed.  Equally, if a car has been modified in any way as to affect the risk this must be disclosed.  This disclosure about car modifications doesn’t just extend to modifications to the engine to give more power or to the brakes or suspension for roadholding.  They might even include re-badging a car that would make it look better but equally might be an extra attraction to a car thief.  Jeff Aherne from Cartell.ie gave the example of re-badging a standard BMW with an M badge.  This might attract a thief to think that he or she was stealing an M car.

 

Even on renewal of a policy it is very important to disclose any material change in risk that has taken place since the previous renewal.  These would, of course, include penalty points or any further modifications since renewal.  It is very important to realise that every renewal is effectively a fresh proposal.

 

If any would-be policy holder is in doubt with their proposal form or about changes in risk on renewal or during cover, they should contact the insurance company, get a directive on whether or not it should be disclosed and get the name of the insurance official who spoke to you.

The issues raised in the answer to this NewsTalk listener's question are dealt with in a general way as can only be the case on live radio. Before relying on the advice given in this answer, whether you heard the broadcast or are for the first time reading the issues here please do not rely on the broad advice given. For a detailed professional opinion please consult a qualified legal advisor and for further details read our disclaimer on the Home Page.

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