Disclosure is a long word that can cause a lot of trouble in insurance policies. It seems simple – tell your insurer all the important information about your health, wealth, possessions and occupation. But sometimes an insurance client might misinterpret a question, not recognise a diagnosis or just forget!
We’ve identified some situations where disclosure may be unclear. If you go through these and think they may apply to you, contact your insurer with any queries or new information. This way you can make sure you have disclosed everything you need to so your claim will be successful if all the other policy conditions have been met.
Intentional and unintentional non-disclosureThere is a difference between intentional and unintentional non-disclosure.
Intentional non-disclosure is when you deliberately don’t tell your insurer something they ask about or that is clearly important information – what insurers call material information.
For example, you smoke 10 cigarettes a day and tell your long-term insurer you are a non-smoker. Or you have had a car accident in the past and don’t tell your short-term insurer you had an accident.
People usually do this so they can have a lower premium or in some cases will be granted cover. Unfortunately, this doesn’t work out well because at claim stage the claim has a very good chance of being rejected because this material information was left out.
Unintentional non-disclosure is when you forget to give information, assume the insurer knows or are asked vague question that you think you’ve answered.
Here are some examples:
If something happened a long time ago, you may have forgotten it happened, or forgotten some of the details. You might have had a minor car accident 20 years ago or spent a few hours on a drip in an emergency room. These events could easily slip your mind.
What to do: Think back on the big events that happened to you health wise and possession wise. Have you ever had a burglary or car accident, have you ever been in hospital or received treatment? This can jog your memory and if you do remember something, tell your insurer. If it happened a long time ago it may not be material or alter the policy, but if it does mean your policy needs to change at least it is a change and not a rejection when you claim.
You don’t understand the question
Insurers sometimes talk a different language. It happens like this: you break your arm, it heals, and then a few years later your insurer wants to know if you have ever had a disorder of the skin, muscles, joints or bones. You just know you had a broken arm, and that isn’t what is asked in a language you understand.
Or you are asked for a medical diagnosis and you only know the layman’s term, and don’t answer or answer no.
Another scenario could be where two things happened at once – you were hospitalised for pneumonia, and while you were in hospital you had a severe asthma attack. Now you haven’t spent time in hospital because of asthma, but your insurer usually needs to know if you have had a severe attack.
This can also happen with short-term insurance policies. You are asked if you regularly maintain your gutters (this matters because in a storm gutters ensure rainwater runs away and doesn’t accumulate causing damage). But you’re not too sure what regularly means – you think once a year, your insurer thinks once a season, which is four times a year.
Or you are asked if you live near an open veld or a thatched roof house. What is “near” and do you know what all the house roofs in your area are made of?
What to do: Check your medical records and if you don’t know the medical terms use layman’s terms – such as heart problem, or broken bone. If you have received medical treatment think back to what it was for and ask your insurer if you answered the question correctly. You probably did, but you can always check to make sure. And always say if you don’t understand or don’t know.
Then check on your short-term insurance policy to see why a claim would be rejected and if any of them ring a bell, contact your insurer and ask if you should have told them something or what they mean by certain terms and phrases.
Something changes in your life
There are certain things your insurers need to know. When these change you need to tell your insurer – here are some examples and which insurer you need to tell.
1. You start smoking (long-term insurer).
2. You travel outside South Africa or start working outside the country (long and short-term insurer).
3. You take up a dangerous hobby or hazardous pursuit – drag racing for example (long-term insurer and short-term insurer if you are using things they have insured like your car).
4. You change jobs (long-term insurer)
5. You change security such as locked garage or neighbourhood watch (short-term insurer).
6. You have a burglary, car accident, or suffer damage to your home or possessions in a weather-related incident (short-term insurer).
What to do: Look at all the changes you make in your life. If something has changed, you need to tell your insurer.
In closingAlthough non-disclosure in these examples is unintentional, if your insurer believes it to be material, they may reject a claim. So, it is definitely preferable to let them know about it now. It might happen that your policy is altered – for example a higher excess or premium, or an exclusion could be applied. But this is better than paying your premiums and then not being able to claim at all. By making sure your insurer has all the correct and important information, you are making sure your family has the money they need.