Your Duty of Disclosure is your obligation to be honest and tell us anything known to you and which a reasonable person would include in answer to the questions we ask.
To make an accurate assessment of the risk, insurers must be confident that the information disclosed is representative of the facts. If the information is not true, it is a misrepresentation.
As per Sections 21 and 21A of the Insurance Contract Act, a customer must:
- disclose matters they know to be relevant to the policy
- disclose matters that a ‘reasonable person in the circumstances’ would know to be relevant to the insurer
Under section 21A, insurers must ask customers specific questions about the risk when arranging new business. If a customer fails to provide satisfactory answers to questions expressed in vague or general terms, the insurer cannot claim there has been non-disclosure.