The Insurance Ombudsman has agreed with an insurance company refusing to insure a client due to dishonesty.

The client purchased a car, using a finance company to borrow the money. The finance company assisted the client with organising insurance over the vehicle.

A year later the car was stolen and the client made a claim with the insurer for a replacement.

However, upon assessing the claim, the insurer noted that the client had several undisclosed criminal convictions. Additionally, the client had completed a schedule at the time they signed up to the policy indicating they did not have any convictions within the previous 5 years.

The insurer declined the claim, voided the policy, and explained to the client that had they known of the convictions, insurance would not have been offered to begin with.

During its investigation of the complaint, the Ombudsman checked with other insurers as to what common practice was in relation to undisclosed convictions. The other insurers confirmed they would have cancelled the policy and declined the claim in a similar situation. This meant that the insurer here was acting in accordance with normal practice.

It is important to be honest when signing up for an insurance policy. If not, you run the risk of losing any cover in a situation where you may need it.

If you are ever unsure what the effects of a clause or question in a policy or application may be, it is wise to discuss them with a professional in the area.

Alan Knowsley
Insurance Lawyer