New law makes it easier to make a successful insurance claim

There is now less chance of getting a personal insurance claim turned down.

Insurance companies will no longer be able to hold back claim money as a result of policyholders innocently forgetting information, thanks to a new law which came into force last week.

The Consumer Insurance Act is all about helping us claim successfully as in the past many cases have been rejected because details have been accidentally left out.

Now the tables are turning and it’ll be up to insurers to make sure they’re asking the right questions to get all necessary information in the first instance. This means insurers won’t be so easily able to decline a customer claim on the grounds of non-disclosure.

This includes all types of personal insurance such as home, car and travel as well as life, critical illness, income protection and annuities. It will apply to insurance however it is bought – be it online, over the phone or in person.

Insurers will need to make sure they ask customers all relevant questions when they sell an insurance product, but claims will still be turned down in certain situations, such as when a customer has deliberately, recklessly or carelessly given wrong or incomplete information.

What will change?

In reality although the new act has now come into force it is likely there won’t be a huge difference when you buy your next insurance product.

The onus has now shifted towards the provider to ask the questions but as Kevin Carr, Chief Executive for Protection Review, explains, the insurance market and in particular the protection market has been working in this way for some time now.

Carr points out that as the Financial Ombudsman views cases in this way already, the act is partly about the law catching up with existing practices.

Providers have welcomed the act as it will protect people from mistakenly failing to disclose information that could affect an insurance claim.

Martin Milliner, LV= Claims Director, says it’s great news because if applicants answer all the insurer's questions fully and truthfully there should be no risk of a claim being turned down due to non-disclosure.

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