The duty to disclose requires that applicants provide insurers with any information that could affect the insurer’s decision to insure them. This duty reaches beyond the questions asked in the form – so even if an insurer fails to ask a question, the consumer is required by law to provide the information.

Almost no consumer fully appreciates the extent of this requirement or the effect it might have on potential claims.

Some commentators, such as Karen Stevens, Insurance & Financial Services Ombudsman, say that ‘Updating our insurance law on unintentional “non-disclosure” would help prevent consumers finding themselves uninsured or uninsurable in future’.

Rebecca Sellers from Melior Law covered legal issues relating to disclosure, at a recent event run by Fidelity Life. Sellers pointed out that the law does not distinguish between ‘intentional or unintentional’ and that most consumers would assume that simply answering the questions on the form honestly would be sufficient to fulfill their duty of disclosure. Yet that is not the case, and claims could be declined for failing to disclose relevant information.

This is a problem area. Increasingly, in society, we are used to being asked to discriminate less: making judgments based on gender, age, and physical ability is generally considered not okay. Never mind that everyone does it a bit, consumers are still surprised at how much insurers can and do ask on the forms.  they don’t think to themselves after completing a good ten pages ‘now what else should I mention’. In fact, we’re lucky if they read the declaration they are signing in full.

But is the claims situation so bad? We don’t know. This is where data lets us down. What would help is to know how many claims were:

• Blatant, obvious, non-disclosure: bare-faced lies: like the case where the client filled in the application form still wearing their hospital identification bracelet, cheerfully ticking ‘no’ to all the health questions.
• A bit hazy: the kind of non-disclosure that could have been due to an overly reassuring doctor. The kind where the Doctor has helpfully said “there’s nothing to worry about” when they really mean “there’s nothing more I can do”
• Totally forgivable: they didn’t disclose that a claim for pet insurance was declined in 1976, when a teenage son ran over their own dog, which, while technically a breach of their duty, has nothing to do with whether they should get paid out for an open and shut heart attack claim today.

Having said that, really good insurers don’t hunt for irrelevant reasons not to make a claim – and they do pay plenty of claims.