Important Information about Insurance
YOUR DUTY OF DISCLOSURE AND THE DUTY TO TAKE REASONABLE CARE NOT TO MAKE A MISREPRESENTATION
YOUR DUTY OF DISCLOSURE (*Non-Consumer Insurance Contracts only)
Before you enter into a general insurance contract, you have a duty to tell the insurer anything that you know, or could reasonably be expected to know, that may affect the insurer’s decision to insure you and on what terms.
You have this duty until the insurer agrees to insure you.
You have the same duty before you renew, extend, vary, or reinstate an insurance contract.
You do not need to tell the insurer anything that:
- reduces the risk they insure you for; or
- is common knowledge; or
- the insurer knows, or should know; or
- the insurer waives your duty to tell them about.
If you do not tell the insurer something
If you do not tell the insurer anything you are required to, they may cancel your contract, or reduce the amount they will pay you if you make a claim, or both.
If your failure to tell the insurer is fraudulent, they may refuse to pay a claim and treat the contract as if it never existed.
THE DUTY TO TAKE REASONABLE CARE NOT TO MAKE A MISREPRESENTATION
The duty to take reasonable care not to make a misrepresentation – (**consumer insurance contracts only) – NEW BUSINESS
You have a duty under the Insurance Contracts Act 1984 (ICA) to take reasonable care not to make a misrepresentation to the insurer (your duty).
Your duty applies only in respect of a policy that is a consumer insurance contract, which is a term defined in the ICA.
Your duty applies before you enter into the policy, and also before you renew, extend, vary, or reinstate the policy.
Before you do any of these things, you may be required to answer questions and the insurer will use the answers you provide in deciding whether to insure you, and anyone else to be insured under the policy, and on what terms. To ensure you meet your duty, your answers to the questions must be truthful, accurate and complete.
If you fail to meet your duty, the insurer may be able to cancel your contract, or reduce the amount it will pay if you make a claim, or both.
If your failure is fraudulent, the insurer may be able to refuse to pay a claim and treat the contract as if it never existed.
The duty to take reasonable care not to make a misrepresentation – (**consumer insurance contracts only) – RENEWALS
Before you renew or vary your policy, you have a duty under the Insurance Contracts Act 1984 (ICA) to take reasonable care not to make a misrepresentation to the insurer (your duty).
Your duty applies only in respect of your policy that is a consumer insurance contract, which is a term defined in the ICA.
This notice includes information you have previously told us that is relevant to your policy, which we passed on to the insurer. The insurer requires you to contact us to tell us if this information is incorrect, or if it has changed. If you do not tell us about a change to something you have previously told us, the insurer will take this to mean that there is no change.
To ensure you meet your duty, when you contact us to advise of any information that is incorrect or has changed, the updated information you give us must be truthful, accurate and complete.
If you fail to meet your duty, the insurer may be able to cancel your contract or reduce the amount it will pay if you make a claim, or both.
If your failure is fraudulent, the insurer may be able to refuse to pay a claim and treat the contract as if it never existed.
*Consumer Insurance Contracts are defined as:
Motor vehicle; Home building; Home contents; Sickness and accident; Travel; Personal and Domestic Property Insurance Products and Consumer Credit, ie., insurance cover obtained wholly or predominantly for personal, domestic or household purposes of the insured, unless a policy is nominated to be a consumer insurance contract by the insurer.
*Non-Consumer Insurance Contracts are:
All other contracts not considered ‘consumer’ contracts as described above.
Material Changes
You must also notify your insurer of any significant changes which occur while the policy is on risk or under negotiation. If you do not, your insurances may be inadequate to fully cover you.
We can assist you tell the insurer about changes and to ensure that your contract of insurance is altered to reflect those changes if necessary.
Sums Insured – Average and Co-Insurance
Some insurance policies require you to bear a proportion of each loss or claim if the sum insured is inadequate to cover the amount of the loss. These provisions are called ‘average’ or ‘co-insurance’ clauses.
If you do not want to bear a proportion of any loss, when you arrange or renew your contract of insurance ensure that the amount for which you insure is adequate to cover the full potential of any loss. If you insure on a new for old basis, the sum insured needs to be sufficient to cover the new replacement cost of the property.
Additional Insureds and Noting Interests
If a person or entity has requested to be named on your policy or insured as a co-insured or joint insured, notify us immediately so we can request this in advance from the insurer. Your property and liability policies will not provide automatic cover for the insurable interest of other parties (e.g. mortgagees, lessors)
Check with us whether the insurer will include someone else as an insured or note their interests before you agree to this in a contract or lease. We cannot guarantee that an insurer will agree to include a separate entity as an insured under your policy or to note their interests on your policy.
Waiver of Rights
Some insurance policies seek to limit or exclude claims where the insured person has limited their rights to recover a loss from the person who was responsible for it, e.g. by signing an agreement which disclaims or limits the liability of the other party.
Please tell us about any contracts of this type which you have or propose to enter into.
Unusual Terms
If an insurer wants to rely on a term in an insurance policy which is not usually included in policies that provide similar cover, they must clearly inform you in writing of that term. Again, they may do so by providing you with a copy of the insurance policy.
Dated: October 2021
