Insurance

Are you insured, have you read your Terms & Conditions, and do you know your duties, pursuant to the Insurance Policy and the statute governing Insurance Contracts?

Insurance Law is one where financial risk is transferred from one person/organisation to another person/organisation, in exchange for a consideration, which in most cases is monetary. If you are deciding on taking up a policy to transfer your financial risk or you have already taken one, what is the most critical is that you peruse in detail your terms and conditions and precisely understand situations in which you might be denied claims. We highly recommend you get some legal advice, prior to proceeding with a certain Insurance Policy, to ensure you understand the terms and conditions.

Also be aware that, there are certain circumstances, apart from those mentioned in the policy, in which you could be denied the claim. One of the most common reasons for an insured to be denied a claim is when you are in breach of your duty to act in utmost good faith. There is no clear definition in the Insurance Contracts Act 1984 (hereinafter referred to as “the Act”), for utmost good faith. The Act obliges all parties to act in utmost good faith, which means that you should act honestly, fairly and not withhold any information that is critical and relevant to the policy. Accordingly, if you as an insured does not act in utmost good faith, you could be denied your claim. There is no exhaustive list for the insured’s duty to act in good faith. It depends on the factual circumstances and varies from case to case. The following are a few to outline;

1. The duty of disclosure is a manifestation of utmost good faith. The insured must disclose all information/documentation, that could be relevant to the policy and to the decision of insurer. The basic principle when dealing with an insurer is ‘if in doubt, declare’.
2. The insured must not deliberately provide a false answer in a claims form or recklessly complete the form and must not intentionally withhold information in making a claim, with an intention of deceiving the insurer.
3. The insured must act reasonably to reduce or minimise the insurer’s liability.
4. The insured must provide information required by the terms of the policy and the insurer and in the case of a legal indemnity policy, the insured must advise the insurer that proceedings had been initiated against it.
5. The insured must not fraudulently make a claim, exaggerate the circumstances pertaining to a claim and engage in horse trading to settle a claim.
6. The insured must provide information to enable the insurer to decide on indemnity and must notify the insurer immediately, of circumstances which may affect the insurer’s future conduct with respect to the policy.

If you are struggling on deciding whether you should proceed with an insurance policy or you are denied a claim by your insurer, please feel free to contact us on 02 8917 8700, we can assist you in resolving the matter amicably and expeditiously.