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Contract of Insurance (Remedies for breach on duty of pre-contractual…
Contract of Insurance
Remedies for breach on duty of pre-contractual disclosure
deliberate of reckless breach - insurer to avoid the contract and keep any premiums
breach neither deliberate nor reckless, insurer would not have entered into the contract: insurer to avoid the contract, but must return any premiums
breach is neither deliberate nor reckless, insurer would have entered the contract on different terms - insurer able to treat the contract as if those terms apply
breach neither deliberate nor reckless, insurer would have entered the contract for a higher premium; insurer can reduce the cover on a proportionate basis
Parties involved
the proposer (one taking out the policy)
the beneficiary (receiving the funds paid out by the policy)
the insurance company (the insurer)
Insurance policy- a contract
uberrimae fidei (a contract of the utmost good faith)
the contract becomes voidable at the option of the insurance company should all material facts not be disclosed at the time the policy is taken out
material fact - if it would influence the judgement of a prudent insurer in deciding whether to accept the risk, and if son, at the premium and on what conditions
London Assurance v Mansel
- insurance contract voidable due to non-disclosure
Changes made by the Consumer Insurance Act 2012
Consumer insurance contracts
placed a duty on insurers to ask customers all relevant questions
provides legal protection for customers that claims will not be declined for non-disclosure unless information is deliberately or carelessly withheld or misleading
applies to all personal insurance (home, car, travel, life, critical illness)
applies to matter how insurances is purchased (online, phone, f2f)
Non-Consumer contracts
make it harder for insurers to avoid claims as a result of technical breaches by the insured
created a new duty of fair presentation aimed at encouraging active, rather than passive engagement by insurers
insured parties must disclose every matter which they know (ought to know) that would influence the judgement of an insurer
parties must disclose sufficient information to put an insurer on notice that it needs to make further enquiries about potentially material circumstances