Failure to disclose can and will be used as a reason to reject or scale down a claim.
So whether it is a wart on the nose, a pimple on the bottom, a child’s asthma attack or a no-fault shunt in a car park, we are expected to tell all.
Yet too often the insurance companies have operated disclosure like a one-way mirror.
While they want to see any aspect of our lives which might just possibly affect the cost of underwriting, they have all too frequently attempted to keep any nasties well hidden.
Take the cost of renewal. Some of us have argued for many years that insurance companies should be forced to put the cost of the previous year’s cover on the renewal quotation.
If they were as open and honest as they expect their customers to be then this should be a given. Instead they will finally be forced to do it by the FCA.
“Too often the insurance companies have operated disclosure like a one-way mirror” Tony Hazell
Naturally the FCA has decided it must dictate the form of wording because otherwise there is a risk that insurers will try to wriggle their way around it.
For example, I can imagine some might try to compare the new quotation offered with the original quotation provided the previous year rather than actual amount paid, which may well be smaller.
It is, of course, right that consumers should be honest with insurers. But it is equally right that insurers should be open with us. That still does not happen despite clearer disclosure documents – which also had to be forced on the industry by regulators.
Consumers see their premiums rocket because something in the so-called big data suggests that they are suddenly a higher risk.
Merely making an enquiry about a claim can trigger a premium rise whether or not a claim is actually made.
Being the innocent party in an accident can cause a rise because insurers have decided this makes us more likely to be a victim a second time – insurers do not believe that lightning does not strike twice.
Of course, many consumers do not know this, so they still innocently phone for advice without realising they will pay for this when their premium renewal comes through.
So, here is a thought insurance companies executives might like to ponder over the festive season. You expect your customers to be open with you, so why not try reciprocating?
Pension mention incomprehension