In a bid to reduce the number of disputes over insurance claims reaching the courts, the Government has made changes to the law which it is expected will come into effect in 2013.
The Consumer Insurance (Disclosure and Representations) Act 2012 abolishes the insured’s requirement to do more than to answer any question raised by the insurer reasonably and honestly. It will be the responsibility of the insurer to ask for any necessary information and the insured will not have to ‘volunteer’ information.
The insurer will only be able to deny a claim when the insured has made a deliberate or reckless misrepresentation.
In practical terms, the Act will probably mean that insurances will take a little longer to obtain in some circumstances, the policy proposals will ask more, (and more detailed) questions, and premiums may rise. However, the probability of being drawn into lengthy and expensive litigation over a denied claim will be much reduced.