Are insurers exploiting policyholders when minor 'material facts' are not disclosed?
I quote from my renewal notice:
"MATERIAL FACTS - DUTY OF DISCLOSURE: All material facts must be disclosed. Failure to do so could invalidate the policy. A material fact is one which is likely to influence an insurer in the acceptance and assessment of the proposal. It is an offence under the Road Traffic Acts to make any false statement or withhold any material information for the purpose of obtaining a certificate of motor insurance. IF YOU ARE IN ANY DOUBT AS TO WHETHER A FACT IS MATERIAL THEN IT SHOULD BE DISCLOSED TO YOUR INSURER."
Examples include: Details of any accident or loss (whether or not you make a claim) involving your vehicle or that occurs while you, or any driver on your policy are driving anyone else's vehicle. Perhaps I have over-stated the case in describing RTA offences as criminal offences but it must be more than a mere breach of contract, the danger being that your insurer could legitimately refuse a claim (and one doesn't need to give them much encouragement to do that).
"MATERIAL FACTS - DUTY OF DISCLOSURE: All material facts must be disclosed. Failure to do so could invalidate the policy. A material fact is one which is likely to influence an insurer in the acceptance and assessment of the proposal. It is an offence under the Road Traffic Acts to make any false statement or withhold any material information for the purpose of obtaining a certificate of motor insurance. IF YOU ARE IN ANY DOUBT AS TO WHETHER A FACT IS MATERIAL THEN IT SHOULD BE DISCLOSED TO YOUR INSURER."
Examples include: Details of any accident or loss (whether or not you make a claim) involving your vehicle or that occurs while you, or any driver on your policy are driving anyone else's vehicle. Perhaps I have over-stated the case in describing RTA offences as criminal offences but it must be more than a mere breach of contract, the danger being that your insurer could legitimately refuse a claim (and one doesn't need to give them much encouragement to do that).
Asked on 4 July 2011 by RE, via email
Answered by
Honest John
This is precisely how Brits set themselves up to be ripped off. We are talking about minor scrapes, not “material facts”. This clause is intended to cover significant bumps. The Insurance business is using it to exploit policyholders. The matter therefore needs to be challenged in the Supreme Court for a sensible ruling. It is patently ridiculous for a policyholder to be compelled to report a £200 scratch that his insurer will not pay for anyway under a £200 excess, but as a result of which it penalises the policyholder with increased premiums.
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insurance
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