What is misrepresentation and non-disclosure?
When you make a claim, an insurer may find something which they think suggests you misrepresented or didn’t disclose information when you took out a policy.
Misrepresentation is where the information you provided to your insurer was incomplete, misleading, either carelessly, deliberately or recklessly. Non-disclosure is where relevant information you were asked about when you took out a policy was left out.
The insurer might argue that if you had given true answers, they would have acted differently. As a result the insurer might:
- want to charge more for the policy
- retrospectively apply a restriction to the policy – which may mean any ongoing or future claim might be declined
- settle a claim proportionately
- avoid the policy – which means any ongoing claim will be declined
Types of complaint we see
Consumers may complain to us that:
- they haven’t made a misrepresentation
- their insurer treated them unfairly by either not meeting their claim, or by altering the terms of their policy
How to complain
Talk to your insurer first so that they have the chance to put things right. They need to give you their final response within eight weeks. If you’re unhappy with their response, or if they don’t respond, let us know.
Bringing a complaint to us is straightforward and won’t cost you anything. We’ll check your complaint is something we can deal with, and if it is, we’ll investigate
Find out more about how to make a complaint.
What we look at
We want to know the insurer acted fairly if they think there’s been a misrepresentation. So if you complain to us that you haven’t been treated fairly, we’ll consider the insurer’s obligations under The Consumer Insurance Disclosure and Representations Act 2012 (CIDRA) and look at whether:
- the questions you were asked were clear and specific
- you took reasonable care to answer the questions correctly
- the information you gave was incorrect or incomplete
- the insurer would have done anything differently if it had been given the correct information
- the insurer has been fair in the way they handled the misrepresentation
If the information given to the insurer was incomplete or incorrect.
We’ll need the insurer to provide evidence showing what questions was asked, what answers were given and proof showing the answer was incorrect. Examples of evidence may include recordings of sale call, copied of application form completed by you or screenshots of online application.
The questions the insurer asks should be clear. If questions aren’t clear, this could have led you to give an incorrect answer.
Sometimes it’s acceptable that customers haven’t told insurers certain information. This could be when the information:
- is something you don’t know or couldn’t reasonably have been expected to know
- is something the insurer should reasonably be expected to know
- isn’t relevant because the insurer waived their right to know it
- reduces the risk to be covered by the policy
- is covered under the Rehabilitation of Offenders Act 1974
If the information given to the insurer is incorrect or incomplete, we’ll look at whether the insurer would offered the insurance policy on different terms.
We take the approach that whether or not you took reasonable care depends on a number of factors including:
- the exact question asked
- what a reasonable consumer would have done in the same situation
It’s vitally important that you do all you reasonably can to answer the insurer’s questions correctly. This is because even small mistakes can have significant consequences on your policy further down the line.
You are only expected to take reasonable care not to make a misrepresentation. It might not be reasonable to expect you to remember exactly when certain events happened, or to know off the top of your head the answer for a joint policyholder. In some cases, it might not be reasonable to expect you to know the answer to a question at all.
But you still have to take reasonable care not to make a misrepresentation. So if you are unsure of the answer to a question, it's reasonable to expect you to find out the answer.
If the insurer thinks the misrepresentation is either deliberate or reckless, we’d need them to show us why. If we’re not satisfied with their reasons, we’re likely to say the misrepresentation was careless.
Where the misrepresentation was careless the insurer’s response should be based on what they would have done if you had taken reasonable care and given the correct answer to the question you were asked. The following could happen if the misrepresentation was careless and it would have made a difference to the insurer:
- charging more for a policy
- offering different terms
- avoiding the policy
Before the policy starts
- It may be that you didn't tell your insurer about something that happened between signing the application or agreeing for the policy to go ahead and the policy starting.
- If the insurer made it clear to you that they needed to know if any of the information you’d given them had changed – and you don’t tell them, we might consider it fair for the insurer to take one of the actions set out in CIDRA.
After the policy started
- We sometimes see cases where the insurer says the customer didn’t tell it about something that happened or changed after the policy started. Usually, the only time you have to give the insurer information is when you buy a policy or when you renew it. But your policy terms might say you need to tell the insurer. If you don’t we’ll consider whether it is fair for the insurer to take any action. But this can’t be a misrepresentation under CIDRA, as you didn’t contact the insurer to tell them about the change.
- The insurer may find out there was a misrepresentation when the policy was taken out originally and it’s been a year or more since it happened. The policy may well have renewed one or more times since then. If the insurer wouldn’t have offered cover originally, they may avoid the original contract and reject any claims in that first period of insurance. But the insurer can only avoid later contracts if you misrepresented again at the later renewals and this would have made a difference to the insurer.
- Some insurers will avoid all the policies back to when they started as a result of a careless misrepresentation. But the insurer should consider each policy individually under CIDRA as a separate consumer contract for each policy year.
When an insurer finds out that information you gave them was incorrect, they can:
- use the remedies available to them under CIDRA
- carry on with the contract you’ve entered into
Generally, if the insurer chooses to carry on with the contract, we think it’s unfair for them to later change their mind. We believe that if they carry on with the contract, they’ve essentially affirmed it and have waived their right to later retrospectively amend the terms of the policy.
However, if the insurer chooses to carry on with the contract, but then discovers the incorrect information, they’ll still have the option to retrospectively amend the terms of the policy or settle a claim proportionately.
Putting things right
If we decide that you haven’t made a misrepresentation or that the insurer unfairly avoided or changed the terms of a policy, we’ll ask the insurer to put things right. This usually involves putting you back in the position you’d be in if things hadn’t gone wrong. For example, we may ask the insurer to:
- reinstate an avoided or cancelled policy
- remove any retrospectively applied terms, so that the terms are the original ones
- settle a claim in full, as opposed to proportionally
- reduce the price of the policy to what it was originally, and refund the difference, plus interest
We’ll also consider whether you’ve experienced any distress or inconvenience as a result of what the insurer did wrong and whether we think it’s appropriate to award compensation.
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Information for financial businesses
If you’re a business looking for information to help you resolve complaints or want to find out more technical information, you can find more detail about complaints about misrepresentation and non-disclosure in the business section of our website.