Don’t lie on your Car insurance Proposal – Even when getting quotes!
Tell the Truth When Purchasing Car Insurance Online Or You Invalidate the Policy
By Dave Healey
Once you’ve compared car insurance online and chosen a policy and price that suits your particular individual needs, you will need to complete a proposal form.
The proposal form,whether online or a paper version will ask you various questions about yourself, your circumstances, your car and your driving history.
When you complete this form it is imperative that you do so truthfully and answer all the questions. If you don’t you could be in for a big shock if you ever need to make a claim.
A car insurance contract is founded on trust and is therefore subject to the legal rule of ‘utmost good faith’ or ‘ultra vires’ as distinct from the normal contract rule of ‘let the buyer beware’ or ‘caveat emptor’.
Both of these rules have been criticised from time to time as it is felt that they are unfair to the consumer. Hence the protection given to the purchaser of goods initially as late as the Misrepresentation Act 1967 and refined by other recent trading standards and consumer protection legislation.
Utmost good faith applies to insurance because the proposer is deemed to know all the facts about the risk being proposed whereas the insurer may have only general or statistical knowledge on which to base his acceptance or rejection of the proposal form.
The legal rule therefore puts the onus on the proposer to declare all the material facts known to him about the risk before the contract is concluded.
This duty exists not only at inception but also at each annual renewal of the motor insurance.
What is ‘material’ has been defined since the Insurance Act of 1906 as ‘every circumstance… which would influence the judgment of a prudent insurer in fixing the car insurance premium, or determining whether he will take the risk’.
Facts that need not be disclosed when buying car insurance are those that:
(a) Lessen the risk;
(b) Are inferred by insurers, usually because they are normally associated with the type of car risk proposed;
(c) Are public knowledge or should be known by the insurer in the ordinary course of business;
(d) Are matters of law;
(e) Are possible of discovery where the insurer has been put on enquiry;
(f) Insurers have waived information about;
(g) Are unnecessary because about;
(h) Are offences which are ‘spent’ by virtue of the Rehabilitation of Offenders Act.
Where a car insurance proposal form has been completed, the proposer cannot rely upon a question not having been asked to render it immaterial.
A proposer may therefore be in breach of the duty of utmost good faith by:
(a) Concealment: i.e. deliberately concealing a material fact;
(b) Non-disclosure: failing to disclose a material fact either inadvertently or because it was not thought to be material;
(c) Fraudulent misrepresentation: making a statement known to be false with the intention of deceiving an insurer;
(d) Innocent misrepresentation: making an inaccurate statement of fact but without fraudulent intent because it was believed to be true.
In all these cases, if the contract has been effected, the insurer can avoid the policy and repudiate liability from inception.
In other words no contract – no claim!
Even if you compare car insurance quotes on-line you are equally obliged to disclose the full facts. Even if you do not go on to take out the car insurance, the quotes are legally binding and therefore by asking for a quote you are obliged to full disclosure of all material facts. Do not try to obtain cheap car insurance through falsifying your proposal.
Article Source: http://EzineArticles.com/?expert=Dave_Healey
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