Last updated: 27 September 2022 Show
When a customer makes a claim, an insurer may find something which they think suggests that the customer misrepresented information when they took out a policy. The insurer might argue that if the customer had given true answers, it would have acted differently. As a result the insurer might:
Types of complaint we seeWhen we receive complaints, consumers tell us that:
Handling a complaint like thisWhen you receive a complaint about misrepresentation, you need to use The Consumer Insurance Disclosure and Representations (CIDRA) Act 2012. When a customer buys or renews an insurance policy, CIDRA says the customer needs to “take reasonable care not to make a misrepresentation”. When you’re deciding if a customer has taken reasonable care, you’ll need to think about:
If the customer didn’t take reasonable care and misrepresented some information that affected the policy, you’ll then decide whether the misrepresentation was careless or deliberate. If the customer did take reasonable care, then even if there was a misrepresentation, you can’t take any action against the customer. You should reply to your customer within eight weeks. If you don’t reply within the time limits, or the customer disagrees with your response, they can bring their complaint to us. We’ll check it’s something we can deal with, and if it is, we’ll investigate. We’ll expect you to be able to show us that you’ve investigated the complaint thoroughly and that you have reflected carefully on the circumstances. Find out more about how to resolve a complaint. What we look atWe want to know that you acted fairly if you decide there’s been a misrepresentation. So if a customer complains to us that they haven’t been treated fairly, we’ll consider your obligations under The Consumer Insurance Disclosure and Representations Act 2012 (CIDRA) and look at whether:
Putting things rightIf we decide you’ve treated the customer unfairly, or have made a mistake, we’ll ask you to put things right. Our general approach is that the customer should be put back in the position they would have been in if the problem hadn’t happened. We may also ask you to compensate them for any distress or inconvenience they’ve experienced as a result of the problem. The exact details of how we’ll ask you to put things right will depend on the nature of the complaint, and how the customer lost out. For example, if we decide that you’ve unfairly avoided or changed the terms of a policy, we may ask you to:
Find out more about how we award compensation. Case studiesConsumer complains when insurer cancels policy and declines claim because of misrepresentationBenjamin complains about his motor insurance policy being cancelled after his insurer said he made a misrepresentation when he took out the policy. Subsidence Insurance Buildings insurance Read more Consumer complains when insurer only pays 60% of claim because she did not disclose a previous burglaryFrancis complains after her insurer paid out less than she'd been expecting following a burglary. Contents insurance Theft Insurance Read more Insurer cancels home insurance policy and refuses claim for fire damageTilly complains about her insurer’s decision to “void” (cancel) her home insurance policy. Buildings insurance Insurance Read more Consumer complains about unfair price change in their insurance policyRalph contacted us about unfair price changes to his insurance policy after providing incorrect information. Motor Insurance Up to £300 Insurance Pricing Distress and inconvenience Read more Useful resourcesWhen a misrepresentation on a life insurance policy application is discovered what action may and insurance company take?The two-year period during which the insurer has the right to contest the insurance contract is called the “contestability period.” If, after the investigation, they find significant inaccuracies, referred to as “material misrepresentations”, they have the right to deny paying the life insurance claim.
What makes a life insurance policy void?A policy or other contract that has no legal validity is described as void. When an insurance company voids a life insurance policy, it is usually due to the discovery of misrepresentation of material facts by the person insured.
What is involved when a life insurance policy has been backdated?What happens when an insurance policy is backdated? Backdating your life insurance policy gets you cheaper premiums based on your actual age rather than your nearest physical age or your insurance age. You'll pay additional premiums upfront to account for the policy's backdate.
Whose life is covered on a life insurance policy that contains a payor benefit clause?As mentioned, a payor benefit provision is designed to protect the child of the policyholder in the event the policyholder becomes disabled, dies, or is no longer able to pay for policy premiums.
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