Insurance helps protect you from financial loss when something goes wrong. But what if you’re having trouble getting insurance in the first place?
Duty to take Reasonable Care
Previous to 5 Oct 2021, a consumer applying for a consumer insurance product had a duty to disclose all relevant information about their circumstances to the insurer.
From 5 October 2021, this duty that consumers had to insurarers changed. Consumers who purchase consumer insurance (personal, domestic or those for household purposes of the insured) are now under a duty to take reasonable care not to make a misrepresentation to an insurer when they apply for these types of insurance. This new duty places a more stringent requirement on insurers to ensure they are taking all steps necessary to ensure that the correct questions are being asked. If the insurance contract is not a consumer insurance contract, the duty of disclosure still applies.
It’s then up to insurers whether they will offer insurance cover. This combined with the current tight insurance market means insurers are often asking more questions of insureds and looking more carefully at previously insured risks…and they’re also checking if repairs and any previous damage they may have paid out in a claim have gone towards those specific repairs before offering renewal.
What does this mean for you?
Many insurers are doing more due diligence on the risks they take on. Sometimes there will be a valid reason why an insurer will refuse to cover a risk, or charge someone more than they charge someone else with a similar risk.
Insurers decide the terms and conditions on which to offer insurance cover or whether they offer you cover at all. You may have problems getting insurance if your property has suffered damage in the past or there’s unrepaired damage or even if there’s a history of flooding, bushfires or cyclones in your area. Ignoring damage or ongoing maintenance can also lead to issues with insurance. If you have had convictions especially if your convictions are for fraud, theft, dishonesty, arson, malicious damage then based on our experience, your chances of getting insurance are unlikely. It depends on the type of crime you’ve been found guilty of and the type of insurance you are trying to get.
Identifying and managing your risks
In general, an insurer may want more information about you, your business or your property and assets before deciding whether to insure you and some insurers may not insure you at all, because they think you are too great a risk. You may have specialist needs or take part in higher risk sports or activities. Sometimes, an insurer may take your risk on but charge a higher premium as a result.
As insurance brokers, we focus on finding clients the insurance cover they need with a reputable insurer. We aim to help clients improve their risk management strategies, maximising the cover they get for their spend. Contact us here.