Explaining non-disclosure in car insurance applications
What it means and why your policy could be cancelled or voided
Drivers who’ve had a policy cancelled or voided for reasons of “non-disclosure” are often confused about why this has happened.
As specialists in non-standard car insurance, we’ve helped lots of customers whose policies have been cancelled for non-disclosure; they’ve experienced first-hand how difficult it can be to find affordable cover afterwards. So here’s what non-disclosure’s all about and how you can avoid having it happen to you.
Why insurers need accurate information about your application
Insurance companies need to have lots of information about you, your car and any other drivers to make decisions about your application for insurance and the terms they offer you: the premium, policy excess and any driver restrictions are all examples of things that might be affected by what you tell them.
Confusion over “material facts”
Before April 2013, applicants for insurance were required to disclose “all material facts” to an insurer when taking out or renewing an insurance policy. But this was rather a vague phrase; what exactly is a material fact? Sometimes applicants didn’t know that a piece of information was relevant and if the insurer didn’t ask about it specifically, they could inadvertently fall into the non-disclosure trap.
How the Consumer Insurance Act helps customers avoid accidental non-disclosure
On 6th April 2013, things became a little clearer with the introduction of the Consumer Insurance Act. The Act clarified what information drivers need to disclose to insurers and shifted the emphasis so that a larger obligation is now on insurers to obtain the information they need by asking the right questions in a clear and specific manner.
This means that a customer is far less likely to have a policy cancelled or voided because they accidentally forgot to tell their insurer something, or unknowingly gave them incorrect or incomplete information because the question wasn’t clear.
How non-disclosure can still affect you
The Consumer Insurance Act doesn’t alter a customer’s responsibility to answer all questions as fully and accurately as possible. An insurer can still decline a claim or cancel an insurance policy on the grounds of non-disclosure if they find that the policyholder has deliberately, recklessly or carelessly given incorrect or incomplete information in response to a specific question.
What do “careless”, “deliberate” or “reckless” mean?
Put simply, you must take reasonable care not to misrepresent your circumstances in order to deliberately mislead an insurer, you must tell the truth and make sure, as far as you are able, that the information you give is as complete and accurate as possible.
Disclosing spent convictions
Spent convictions do not have to be disclosed to insurers, regardless of the questions asked by the insurer, but be aware that some convictions remain unspent for several years (we have written an article about how long different offences stay on your licence).
Why renewal time is also important to disclose new, relevant information
Your renewal notice will ask you to check the information your insurance company holds and tell them about anything that has changed since you applied for the policy. This is the time to let them know (if you haven’t already) about any new driving convictions, penalty points, medical conditions, car modifications, accidents – in short, any changes to your circumstances which differ from the information you gave your insurer the year before.
What to do if you’ve had a policy cancelled due to non-disclosure
If you find yourself in this situation, your policy will probably be cancelled with immediate effect, meaning you can’t drive your car again until you’ve found an alternative insurer, so you need to act quickly if you want to get back on the road.
Get in touch with Insure Your Motor for a quote – we’re a specialist broker for drivers who may find it harder to get car insurance; we don’t judge and we have access to insurers willing to cover drivers who have had a policy cancelled.