Disclosure, or Exposure?

Here at Club 4X4, whilst we are in the business of insurance, we are also customers (unfortunately we don’t get free insurance!). As such, we understand that some of the terms and conditions, heavy documentation and disclaimers that are included in every insurance policy can be off-putting.

One certainty is that over the years, as we all increase the number of insurance policies we hold, we tend to start glossing over the components that we once may have stopped to read in more detail. You know, the stuff that helps us understand exactly what our obligations are and what the policy really covers.

Perhaps one of the most important things to take heed of in any general insurance policy, including motor insurance, is the Duty Of Disclosure.

Overseen by the Insurance Contracts Act 1984, the Duty of Disclosure stipulates that before entering into an insurance contract, any information that a reasonable person would expect to have an effect on an insurers’quoting and decision making process must be disclosed.

Put simply, the questions asked during the quoting process give us as the customer an understanding of what the insurer requires to make a decision. As such, the way we answer those questions is subjected to the clauses and requirements of the Duty of Disclosure. It pays to really re-read that question, understand exactly what it is asking for and answer it as accurately as possible. If you aren’t sure, call the insurer. If you do understand the question, but are not sure of the answer, get yourself 100% certain before you commit. Particularly when it comes to claims and driving history!

“It pays to really re-read that question, understand exactly what it is asking for and answer it as accurately as possible”

This duty to disclose is incredibly important and you will often hear a script read out to you, or read it on a web quoting system before you proceed to the quoting questions. The scripting will explain your duty and the consequences of not disclosing information; ultimately reduction or rejection of a future claim you may need to make.

Pretty doom and gloom stuff yes, but a condition upon which you enter into contracts on all general insurance products with all insurers.

It pays to have a think about where you may stand. Often, many insurers will also put conditions on renewal documentation stating that it is the policyholders’ responsibility to update any information that may have changed during the last term of insurance. This will include vehicle details, or in our case modifications, where you live and any driving infringements incurred.

Nowadays, there are various services available to insurer at claims time, such as driving history checks and insurance record reports. All insurers will use these in the process of lodging a claim. The last thing anyone wants is for details to be uncovered about driving or claims histories that were not disclosed.

Could you afford to pay to have yours and potentially another’s car repaired out of your pocket?


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Comments 15

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  1. Why is it you don’t cover people that have gone Bankrupt?
    It’s not always the persons fault when they get into that situation.

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  8. My insurance premiums are based on the apparent risk to the insurer that I may make a claim. If I knowingly provide false, or misleading, information on which the insurer provides my policy rate then this is a fraudulent act in an attempt to reduce their policy costs by defrauding the insurer. But not just the insurer. They defraud the rest of us as well. The time spent investigating, and in some cases defending themselves against these fraudsters is borne by who? Yes that’s right, You and Me. So my advice to anyone contemplating falsifying their history is simple. Don’t do it. You might think you have saved some money today but imagine spending the rest of your working life paying off a denied insurance claim which could be for hundreds of thousands of dollars. I write this as a former Police Officer who has seen the tragedy of insurance fraud and the wishes by those effected in being able to turn back the clock and pay the right premium for the right driving/accident history. Think carefully when answering the questions…

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      Thank you for your contribution.

      Often people don’t really grasp the enormity of what they’re doing. Insurance is a contract, i often ask if people would like when entering other types of contracts?



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