Drivers taking out new insurance products will be given ‘added peace of mind that their claims will not be declined’ if they unknowingly fail to tell insurers everything about their lives.
Under the new Consumer Insurance Act, which comes into force on April 6, it will formalise the process of insurers asking ‘specific questions about information they need to know’.
“We want customers to take out insurance policies with the confidence that they are covered,” explained Otto Thoresen, Director General for the Association of British insurers (ABI). “By placing a legal duty on insurers to ask customers all relevant questions at point of sale, people will know exactly what they need to disclose upfront.”
Under the new Consumer Insurance Act, insurers have a ‘duty’ to ask customers all the relevant questions about the specific information required to value their car insurance.
It will also provide legal protection for motorists, with claims not being declined for not disclosing information – unless the information is ‘deliberately or carelessly withheld or misleading’.
“This Act reflects steps taken by the industry over the years to improve customer awareness of what they need to tell their insurer,” Mr Thoresen added. “For example, the ABI Code of Practice for life, critical illness and income protection insurance, which helped reduce the number of claims declined for non-disclosure.”
The new Consumer Insurance Act does not only cover car insurance, but also home, travel, life, critical illness and income protection insurance, health and pension annuities.
And it does not matter how motorists purchase their car insurance – online, telephone or even face-to-face – as the new rules still apply.
Whether anything will change in reality remains to be seen but it will require insurers to retrain staff and motorists are sceptical as to whether the Consumer Insurance Act will make any positive difference.
