Insurance disclosure is the process of providing information an insurer asks for so it can assess risk, set terms and decide whether to offer cover.
Disclosure means providing information an insurer asks for so it can assess the risk it may cover. This usually happens when you request an insurance quote, buy a policy, make a change or renew your cover.
The details requested will depend on the type of insurance.
For car or van insurance, questions may cover:
For home insurance, questions may cover previous flooding or subsidence, building work, security, occupancy and how the property is used.
Insurers use this information during underwriting. It can help them decide whether to offer cover, what the price may be and whether any limits, conditions or exclusions should apply.
For consumer insurance, you must take reasonable care not to make a misrepresentation. This applies when entering into or changing an insurance contract. It can also apply when an insurer asks you to confirm or correct information already provided, as set out in the Consumer Insurance (Disclosure and Representations) Act 2012.
In practice, you should:
You are not normally expected to volunteer every fact you can think of. Consumer insurers should ask clear questions about the details they need. However, you should not leave out information when a question clearly covers it.
The Financial Ombudsman Service guidance on misrepresentation and non-disclosure explains that the wording of the question, the answer given and the steps taken by the customer may all be relevant if a dispute arises.
Disclosure may not end when the policy starts.
You will usually need to check your details when the policy is renewed. Your policy terms may also require you to report certain changes after cover starts.
For motor insurance, this could include moving home, changing your job, modifying the vehicle, changing its use or receiving penalty points. MoneyHelper’s car insurance guidance advises drivers to keep their details accurate and up to date.
For home insurance, you may need to report building work, a change in how the property is used or a period when it will be left empty. Check your policy wording because notification rules can vary between insurers.
An incorrect answer does not always mean that an insurer can cancel a policy or refuse a claim.
Under section 4 of the Consumer Insurance (Disclosure and Representations) Act 2012, an insurer can only use the legal remedies for a qualifying misrepresentation if you failed to take reasonable care. The insurer must also show that, with the correct information, it would not have offered the policy or would only have offered it on different terms.
The outcome may depend on whether the mistake was careless, deliberate or reckless.
For a careless error, the insurer’s response may reflect what it would have done with the correct information. It could apply different terms, reduce a claim in proportion to the premium paid or treat the policy as if it had never existed if it would not have provided cover.
For a deliberate or reckless misrepresentation, the insurer may be able to avoid the policy, refuse claims and keep the premium. The insurer would need evidence to support its decision. These possible remedies are explained in the Financial Ombudsman Service’s business guidance.
The result will depend on the facts, the questions asked, the insurer’s underwriting evidence and the relevant law. Non-disclosure can therefore have serious effects, but each case should be considered on its own facts.
Read your quote summary, statement of fact, schedule and policy wording carefully. Check names, addresses, claims, convictions, occupations, vehicle use and property details.
Insurance firms must provide communications that support customer understanding and help people make informed decisions under the FCA Consumer Duty rules.
You should still raise anything that looks wrong or unclear. Keep copies of your documents and make a note of important information provided by phone.
