Non-disclosure occurs when a policyholder fails to inform the insurer of material information during the application process or when updating their policy, potentially affecting coverage.
Non-disclosure occurs when a policyholder does not tell the insurer relevant information that could affect cover or terms. Under the current duty to take reasonable care (consumer insurance from October 2021), this means failing to answer the insurer's questions truthfully and accurately.
Under current law, the insurer must prove that the consumer did not take reasonable care. Insurers cannot simply deny claims because information was not volunteered. Clear, specific questions are required.
A TPD insurance applicant didn't mention a prior shoulder injury because the insurer's questionnaire only asked about back conditions; AFCA found no non-disclosure as the question was too narrow
A life insurance applicant failed to disclose they smoked when directly asked; the insurer reduced the death benefit proportionate to the premium difference between smoker and non-smoker rates
A consumer didn't disclose a brief course of mild antidepressants from 5 years ago when applying for income protection; the insurer found this wasn't material to the current claim circumstances and paid the claim in full
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