When we work with clients to put in place new insurance cover, I think we might annoy clients by nagging them to remember everything that might ever have happened to them, even if there isn't a question on the policy relating to that topic. Although it might be annoying, there is method in our madness (and nagging(). Your insurance policy is designed to provide you with money when something bad happens to your health (be it death, or inability to work or a traumatic illness or injury). The last thing that you need in that situation is for your insurance policy to be 'voided' because you forgot to disclose something. Fortunately, with over 20 years of helping people arrange their insurances, we have not had a policy voided because of non-disclosure (so that nagging works!).
However, it does happen, and it is important to remind you and your friends and family of the importance of disclosing everything (even if you don't think it is relevant.)
The Insurance and Financial Services Ombudsman has recently commented on the issue, encouraging advisers to educate their clients:
What we commonly see is a lack of understanding among consumers about what information must be provided to an insurer, and what information is considered “material”.
While policy wordings explicitly state what information is required, our concern is that consumers still don’t appreciate that they need to tell the insurer about everything – not just what they think is relevant. Many consumers also don’t understand how dire the consequences of non-disclosure can be. The most common things people don’t disclose are their pre-existing medical conditions, convictions, and claims history. The message we, at the IFSO Scheme, want to get out to consumers is: if in doubt, disclose.
- Your adviser has a key role in educating their clients about their non-disclosure obligations and the consequences of failing to disclose.
- You should always complete your insurance application form in your own writing.
- If you want your adviser tofill in the form for you, ensure that you check it carefully before signing it and that you receive a copy of that form and that you CHECK what has been written down and that it is accurate. Ensure that you make clear any changes that you require to be made in writing to your adviser.
What you need to do when you are filling in an insurance application:
- Answer all of the questions on the insurance application, even if you don’t think they are relevant.
- Contact your adviser and ask them to contact the insurer if you forget to include something on the application.
- When you renew house, contents or vehicle insurance, tell the insurer about any events (convictions, speeding, accidents, losses, etc) that have happened since the last renewal.
- If you can’t remember your full medical history, ask your doctor for a copy of your medical notes, and double-check the insurance application.
If you have any questions or would like assistance with reviewing or arranging your insurances, contact us at Moneyworks on firstname.lastname@example.org.
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By Carey Church