Understanding intentional and unintentional disclosure
Every industry has its jargon, and insurance isn’t any different! One of the key terms to know and understand in our industry is disclosure. What is it, how does it work, and what happens if you make a mistake?
What is disclosure?
When you apply for insurance cover, you have a duty of disclosure. This means that when you fill out an application, and in all communication with the provider or adviser, the information you give is full, true and correct. This is usually in relation to your personal and family health history, but also covers your occupation and leisure activities.
The insurance provider uses this information to underwrite your insurance – they need to know the full picture to make an informed decision on what they will cover. Basically, they need to know what they are signing up for.
Personal insurance, such as life, trauma and income protection, are guaranteed renewable. This means the insurer can’t just cancel the cover any time they want (unless premiums are not paid), so they only have one shot at accurately assessing the risk you pose. Unless you choose otherwise, they are guaranteeing to cover you for life - so it’s important they get it right!
While rare, if a claim gets denied it is usually the result of a non-disclosure by the client – even if the non-disclosure was accidental.
Be open and honest
Disclosure is a key part of making sure we choose the right policy and that you have the best cover possible.
When you purchase your insurance policy through a Plus4adviser, our thorough process makes it unlikely you would forget to disclose anything. It may seem tedious at the time, but come claim time the thorough process upfront means there shouldn’t be any problems.
Don’t hold back information because you are concerned it will stop you from getting insurance. It would probably come to light when you try to make a claim anyway. There are lots of different providers and policies available, and when we know the full picture we can choose the best provider, policy or combination of policies to get the most comprehensive cover for your circumstances. And for some conditions that trigger a claim, after a symptom-free period you will be covered again.
Material non-disclosure
The main reason claims are not paid out is due to material non-disclosure.
Material non-disclosure means things that are relevant to the claim. For example, if you have a skin cancer diagnosis claim but didn’t disclose a shoulder dislocation that shouldn’t be an issue, however, if you had previously had cancerous moles removed and didn’t disclose that, that may compromise your ability to make a successful claim.
Acting in good faith
While an insurer can void a policy in the case of intentional gross non-disclosure, we all know mistakes can be made and information can come to light during the claim process. In our experience, insurers act in good faith to try and differentiate between unintentional and intentional non-disclosure. Their goal is not to penalise genuine errors, but they do have to assess each case on its merits.
Unintentional non-disclosure - what can you do?
The first step is to speak with your adviser. When they have all the information, they can work with you and the insurance provider to see what pay out you are entitled too and to make sure all your policies are updated.
It is important to remember that insurers do want to pay out on claims. The claims handlers are real people who hate giving bad news, and know the difference a pay-out can make in these major life events.
On a practical level, it can be more stressful, more work and more expensive for them to decline claims, so they want it to go as smoothly as possible. Insurance providers also want a good standing with advisers - we want to look after our clients, so should a provider get a reputation for declining claims we will become reluctant to recommend their policies.
Ongoing disclosure
One of the things that makes personal cover different to home, car or travel insurance is that it is guaranteed renewable. This means any changes in health to you or your family, your occupation, pastimes and so on are all covered post underwriting. So once you have your policies in place, if a parent has a heart attack, you take up sky diving or get a job working with wild animals, you don’t need to tell your adviser or insurance provider about it, unless you’re applying for new insurance or a top up to your current insurance.
Our advisers are passionate about looking after their clients, and making sure they have the cover they need, when they need it.
