New insurance law will protect consumers

April 18, 2013 7:19 am

Early April is a time when all sorts of new regulations and government schemes come into being, and many have been highlighted in the news over the last week. There’s one though which hasn’t captured the same amount of attention which we feel is particularly good to see, and we’ve been waiting for this to happen for a long time.

It’s the new Consumer Insurance (Disclosure and Representations) Act. Morgan Clark flagged this up in a news story a couple of years ago and now finally it has become law.

This new Act will now make insurance laws much fairer for consumers. In summary, it now puts the onus on insurers to ask the right questions ‘at point of sale’ to obtain any specific information they need rather than requiring consumers to volunteer the right information.

Replacing an antiquated law

The previous law hadn’t changed since the early years of the twentieth century, and was incredibly complex. It often meant that policyholders discovered they weren’t actually covered for something as they failed to provide the insurer with all the facts when the policy was purchased. All too often, people came to Morgan Clark because they had fallen foul of this antiquated law.

Of course, policyholders will still have to answer fully and accurately, and ‘take reasonable care’ not to provide misleading answers. But there will now be legal protection for customers, no matter how they’ve bought the insurance, which will ensure that claims won’t be declined on the basis of non-disclosure, provided this information was not deliberately or carelessly withheld.

Great news for consumers

The only drawback is that customers are likely to be asked many more questions when they take out insurance, and some of their answers may be subject to follow-up enquiries. But overall it’s really good news for the consumer, and we welcome this as it provides greater clarity for them on exactly what cover they have.

If you’d like to read about the Act in detail, then you can see it explained in full here: http://www.legislation.gov.uk/ukpga/2012/6/contents/enacted.