Duty of Disclosure
Your obligations when providing information to an insurer depend on the type of insurance. This page brings together the two duties under the Insurance Contracts Act 1984 and explains their implications for general insurance.
Non-consumer insurance — duty of disclosure
Before the insurer agrees to provide cover, disclose matters you know that you know are relevant, or a reasonable person in your circumstances would consider relevant, to its decision to accept the risk and set the terms. The duty continues while your proposal is being considered and applies again before renewal, extension, variation or reinstatement.
You do not need to disclose matters that:
- lessen the risk being insured;
- are common knowledge;
- the insurer knows, or should know in the ordinary course of its business; or
- the insurer has waived the requirement to disclose.
Consumer insurance — duty to take reasonable care
For consumer insurance, you must take reasonable care not to make a misrepresentation to the insurer. This generally concerns insurance obtained mainly for personal, domestic or household purposes. It also applies when renewing, extending, varying or reinstating that insurance.
Read questions carefully, check your answers and seek clarification if needed. Reasonable care depends on the circumstances, including how clear the questions were and any relevant personal circumstances known to the insurer. An incorrect answer does not automatically mean you breached the duty.
Non-disclosure and misrepresentation
A breach of the applicable duty can affect your insurance. Subject to the Act, the insurer may cancel the policy or reduce a claim payment, or both. Claim remedies depend on what the insurer would have done without the breach. Fraud may allow the insurer to treat the contract as never having existed and refuse a claim.
If you are unsure
Check the insurer’s application, disclosure notices and policy documents. Contact Aushine Insurance before proceeding if you need help understanding your obligations or correcting information.
This is a plain-English guide to general insurance, not a replacement for the insurer’s applicable notices. Original provisions: Insurance Contracts Act 1984, sections 11AB, 20B, 20E, 21, 28 and 60; Insurance Contracts Regulations 2017, Schedule 1, Part 1.