People who take out insurance will soon have peace of mind that their claims will not be declined if they unwittingly fail to disclose information to their insurer.
This is set to be the case under the new Consumer Insurance Act, which is coming into force on April 6th and will formalise existing industry practices to make sure insurance firms ask customers the right questions.
Other terms of the Act include providing legal protection for customers to ensure their claims will not be denied for non-disclosure unless information is deliberately withheld.
According to the Association of British Insurers (ABI), placing a legal duty on insurers to ask customers all relevant questions at point of sale will mean people know exactly what they need to disclose.
It claimed: “This Act reflects steps taken by the industry over the years to improve customer awareness of what they need to tell their insurer.”
This comes after the ABI published guidance on dealing with non-disclosure in 2008 and saw the rate of life, critical illness and income protection claims declined for non-disclosure drop from eight per cent in 2007 to two per cent in 2010.