consumer insurance act 2012 Flashcards
explain the 2012 act
this is a comprehensive guide to the 2012 act. this guide should not be taken as legal advice and should you need legal advice do not hesitate to contact us on …..
comes into force from 6th april 2013 and gives customers more clarity on what information should be disclosed when taking out insurance.
your insurer will have to ask you specific questions to obtain relevant information and you must answer them honestly and carefully.
the act gives you legal protection if you unknowingly give incorrect or incomplete information to your insurer. therefore, your insurer cannot decline a claim on the grounds of non-disclosure unless you did so deliberately or recklessly.
which policies does the act apply to?
the act applies to insurance policies taken out for personal use. this includes, home, pet, car, travel insurance.
insurance purchased through price comparison websites like money supermarket are also covered.
how can my insurer decline my claim on grounds of non-disclosure?
under the act insurers can still decline a claim if it is found that you deliberately, recklessly or carelessly give incorrect or incomplete information.
this will occur when you are answering questions about your circumstances under which you have a duty to answer correctly.
an example of this could be applying for car insurance and stating that you have had no accidents or criminal convictions when you do.
how do i know if i am being careless, deliberate or reckless when answering my insurers questions?
you are expected to take reasonable care to avoid misrepresenting your circumstances.
this means making sure that you don’t give your insurer information which is untrue or could mislead them.
if you make a statement which is untrue or misleading and know or don’t care that it is untrue or misleading then you are acting deliberately or recklessly.
if you do not act deliberately or recklessly but still provide untrue information you will be acting carelessly. it is unlikely an insurer will cancel a claim under a careless misrepresentation, usually a proportionate remedy will be applied.
how is my policy affected by misrepresentation?
to cancel your claim your insurer must show that the misrepresentation made alters the situation so much that had they known in the first place, they would not have accepted your policy.
this usually applies to reckless or deliberate misrepresentations and it is unlikely your premium will be returned to you.
if your insurer would have accepted your policy but on different terms such as a higher premium, this will be balanced through your claim.
this usually applies to careless misrepresentations, however the insurer can still decide to cancel your policy but your premium will be returned to you.
for example, premium is £500 but would’ve been £1000, awarded half the claim.
what’s the flow chart for this client guide
intro
what policies foes the act apply to
how can my insurer decline my claims on grounds of non-disclosure
how do i know if i am being careless, deliberate or reckless when answering my insurers questions?
how is my policy affected by misrepresentation?
