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Information you need to give an insurer

This advice applies to Scotland

Insurance can protect you when things go wrong. When you decide to take out insurance there are things that your insurer needs to know so that they can work out what the risk is of insuring you and how much that will cost. This page explains what you need to tell an insurer when you take out insurance and what an insurer’s responsibilities are. It also explains what happens when you don’t give the information asked for.

Applying for insurance

When you buy insurance you will usually have to complete an application. This is known as a proposal form if you complete it face-to-face. It's called a statement of facts if you complete it over the phone or on the internet.

A proposal form may include a clause allowing the insurer to check databases such as the Claims and Underwriting Exchange database. This is a record of insurance claims. You are unlikely to get cover if you refuse accept this clause.

Check all the information in your proposal form, or statement of facts, very carefully before you sign it, to make sure that it is correct. This is especially important if a broker or agent has filled it in on your behalf, or you bought the insurance over the phone or on the internet. You have a right to have a copy of your application.

Your insurer needs to ask all the relevant questions when they sell insurance

From 6 April 2013, you will know exactly what information you have to tell your insurer under the Consumer Insurance (Disclosure and Representations) Act 2012.

You don’t have to think about what information you must volunteer to your insurer. Your insurer must ask all the relevant questions when you take out, change or renew a policy. You must answer the insurer's questions honestly and you must take reasonable care that your replies are accurate.

If you unknowingly give incorrect or incomplete information to your insurer, your insurer can’t refuse a claim. If you deliberately or carelessly withheld information or mislead your insurer, they can refuse your claim.

This legal protection applies to all personal insurance, including home, car, travel, health and life cover whether the insurance is bought over the phone, face to face or online.

Taking reasonable care with insurers’ questions

Whether or not you have taken reasonable care when answering insurers’ questions will depend on the type of insurance, the insurer's publicity material, how clear and specific the insurer's questions were and whether the consumer used a broker or intermediary.

Insurers would still be able to ask general or open-ended questions. Whether or not your response was reasonable depends upon how clear the question was.

What your insurer can do if you deliberately don’t tell them something and make a claim

If you deliberately withhold information or mislead the insurer, they can avoid the contract and refuse all claims. An example of deliberately withholding information is not telling an insurer about a medical condition you have.

They will need to prove this. They don’t have to return the premiums paid, unless it’s unfair to keep them, for example in the case of joint policy where only one person acted dishonestly.

What your insurer can do if you make a careless mistake when telling them something and make a claim

If you make a careless mistake when you apply for insurance, and the insurer wouldn’t otherwise have entered into a contract with you, they can end the contract and refuse all claims, and must return premiums paid to you. An example of being careless is if you accidentally leave out some crucial information or tick the wrong box by mistake.

They will need to prove that you were careless. This doesn’t apply to life insurance where the insurer can’t end the contract.

If the insurer would have entered into the contract on different terms, they can treat the contract as if it had been entered into on those different terms. For example, if they would have excluded something from the policy and you make a claim that falls within that exclusion, they don’t have to pay out.

If they would have charged a higher premium, they can reduce the amount they pay on a claim. What they often do is offer you the option of paying the additional premium or take the cost of the extra premium away from the final claim payment.

The insurance contract will also be treated differently in the future. The insurer can either change the terms of the contract, or end the contract with reasonable notice and return premiums paid.

The contract can’t be ended by the insurer if it’s for life insurance. If the terms of a life insurance contract are changed and there is more to pay, you can choose to accept the terms or end the contract.

Changes in circumstances

If there is any change in your circumstances you should tell your insurer immediately or as soon as you can. For example, if you move house or change your car, tell the insurer before this happens so that you are covered by your policy when the change takes place.

You should check your policy to see what changes you have to report.

If you deliberately don’t tell your insurer or make a careless mistake

If you deliberately withhold information or make a careless mistake when telling your insurer about a change to your policy, the insurer can refuse your claim, treat the contract as if it were on different terms or charge a higher premium.

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