Non-disclosure

What does non-disclosure mean?

Non-disclosure means leaving out relevant information that an insurer asked you to provide. It may happen when you buy, change, or renew an insurance policy.

It is closely linked to misrepresentation. A misrepresentation may involve giving an incorrect answer. Non-disclosure usually involves leaving an answer incomplete or failing to provide requested information.

For personal insurance, the Consumer Insurance (Disclosure and Representations) Act 2012 says consumers must take reasonable care not to give an insurer incorrect or incomplete information. You do not have to guess every fact an insurer might consider relevant. You should answer the questions asked fully and accurately.

What information might an insurer ask for?

The information needed will depend on the type of policy and the insurer’s underwriting rules.

For car or van insurance, questions may cover:

• previous accidents and claims history
• driving convictions
• the main driver and named drivers
• vehicle use and class of use
• modifications
• where the vehicle is kept

For home insurance, you may be asked about previous claims, flood risk, subsidence, security, building work and whether the property is occupied.

Check dates and details rather than estimating where possible. You should also review the proposal form, statement of fact, schedule and policy documents. Tell us or the insurer promptly if you find an error.

How can non-disclosure affect insurance?

An insurer cannot always cancel a policy or refuse a claim simply because an answer was incomplete.

It will usually need to show that you did not take reasonable care and that the correct information would have affected its decision. For example, it may have charged a different premium, added an exclusion or chosen not to offer cover.

The Financial Ombudsman Service’s guidance on non-disclosure explains that the result depends on the facts and how the mistake happened.

Careless non-disclosure

Where the mistake was careless, the insurer’s response should reflect what it would have done with the correct information.

Depending on the circumstances, Schedule 1 of the Consumer Insurance (Disclosure and Representations) Act 2012 may allow the insurer to:

• apply different policy terms, including an exclusion
• apply different policy terms, including an exclusion
• reduce a claim payment
• avoid the policy if it would not have offered cover, meaning the policy is treated as though it did not exist and the premiums are returned
• terminate future cover by giving reasonable notice or propose revised terms where the Act permits

The Financial Ombudsman Service’s guidance for insurers explains how these remedies may be assessed.

Deliberate or reckless non-disclosure

Where information was left out deliberately or recklessly, the insurer may have stronger rights. It could treat the policy as though it did not exist, refuse claims and, in some cases, keep the premium.

The outcome will depend on the evidence, the insurer’s questions and the policy terms.

Do you need to report changes during the policy?

When you arrange, renew or change cover, you must take reasonable care not to make a misrepresentation.

Once the policy has started, the policy wording may require you to report certain changes straight away. This could include a change of address, vehicle use, occupation, property occupancy or a new driver.

Requirements vary by insurer. Check your policy wording and contact us when you are unsure whether a change needs to be reported.

What about spent convictions?

You may be asked about criminal or driving convictions when applying for insurance. You should answer the exact question asked.

You do not normally have to disclose a conviction once it is legally spent. However, a driving endorsement can remain on your driving record after the conviction becomes spent. The GOV.UK guidance on spent convictions explains when past convictions usually need to be declared.

Check whether a conviction is spent or unspent before answering.