Never LIE to your...Doctor…Lawyer and most importantly your INSURER!
It’s really easy to open-up and disregard privacy when it comes to our doctors or Lawyers, but insurer……may be not. Partly because we don’t understand the importance and consequences. When we are at the door steps of a doctor or lawyer ,we have possibly already exhausted all our options and understand the criticality of the situation. But when it some to insurance it’s not the same, for once we all agree that insurance has traditionally never bought but always sold. So somehow it doesn’t look like a need rather a forced obligation to the person selling it. That is when we fail to do the required research or take steps to understand the importance of Insurance and disclosure. That’s why we get really reluctant to share all required information. Insurance like any other legally binding contracts has its own terms and conditions, and the insurer needs to know all about the risk that they going to carry.
Most of the disputes at the time of claims arise because the applicant has not fulfilled their duty to disclose certain information to the insurer. So before we delve further lets understand what do we mean by nondisclosure of material information and what exactly is material to the subject matter of insurance.
Material information → Anything and everything that may help the insurer make an informed decision w.r.t acceptance of risk. This information would influence whether the insurer offers cover and on what terms.
Nondisclosure → When you fail to reveal intentionally or not, a material fact when applying for, or renewing, insurance.
An insurance contract is a "contract of utmost good faith", which means that all parties involved are under obligation to be completely honest with each other. Depending upon the form of coverage sought, the application form will contain a list of questions regarding the applicant's background, business activities, personal and family medical history, occupation etc. And like all legal contracts it will have a declaration to be agreed and signed by the applicant that the answers provided are full, complete and true to the best of his knowledge.
I want to basically educate consumers so they recognize the consequences of non-disclosure of information, which may seem trivial to them but can actually invalidate their insurance policy leaving them exposed at the times of a crisis. The simple message is, when in doubt share it with your insurer so you have peace of mind and certainty that you’re covered. Most forms of insurance are long term contracts and something that may seem small to you today, may hit you very bad down the line.
If the applicant fails to fulfil this duty, the insurer may:
- Refuse to honor your claim.
- Void the policy.
Last but not the least, better be safe than sorry. Be true to your insurer and don’t hide anything and enjoy a covered life!