Hi cat 1
This is an extract from a typical clause in an insurance policy relating to "Material Facts"
Any omission, misrepresentation or false statement of a material fact in your application for this insurance or any claim could affect the payment of benefits under this Policy. A material fact is one, which is likely to influence the eligibility and acceptance of your application or claim for insurance. If you are uncertain whether a fact is material you should declare it. If you make a claim which we consider to be fraudulent or exaggerated, all benefits under this Policy will be lost, no refund of Premium shall be payable, and we will seek to recover any benefits paid under that claim.
How do you know whether something is likely to influence the eligibility or acceptance of your application or claim ?
YOU DON'T, AND YOU CAN'T.
If I am considering an application from you for Payment Protection Insurance THERE IS NO WAY FOR YOU TO KNOW HOW MY THOUGHT PROCESSES WORK.
If you decide not to tell the Insurer you are Bankrupt or in an IVA (because you do not consider this to be a material fact), you do not now whether they would have declined your application if that fact had been disclosed. The effect of this is that YOU DO NOT KNOW WHETHER YOU HAVE VALID INSURANCE IN FORCE OR NOT. YOU WILL FIND THAT OUT ONLY WHEN YOU TRY TO MAKE A CLAIM.
The only safe way to proceed is to disclose the information, and have the Insurer CONFIRM TO YOU IN WRITING THAT YOU HAVE DISCLOSED THIS TO THEM, AND THEY HAVE AGREED THAT THIS DOES NOT AFFECT YOUR CONTRACT OF INSURANCE WITH THEM.
When I have posted this in the past, some Forum Members have reacted suggesting that I am being pedantic. My response is this.
THE DAY AFTER YOU SERIOUSLY INJURE SOMEONE IN A ROAD TRAFFIC ACCIDENT IS NO TIME TO FIND OUT THAT YOU ARE UNINSURED !
Finding yourself on the wrong end of legal action for damages that might be greater than £500,000, and the next day receiving a Summons for driving without Insurance, can spoil a Chap's whole day !
Although I was discharged from Bankruptcy in October 1998, an perhaps more importantly BECAUSE I UNDERSTAND HOW THE INSURANCE CLAIMS PROCESS WORKS, I always send the following to any Insurer from whom I am buying cover.
Dear Insurer,
I refer to my application for ***** insurance dated **/**/2008.
Please confirm to me in writing that I have declared to you that
I am / I have been
Bankrupt / in an Individual Voluntary Arrangement / in an informal arrangement with my Creditors (Debt Management Plan)
Please also confirm tht having received this disclosure from me, you have agreed that this does not affect my contract of ***** insurance with you at all.
I am sorry that this is so longwinded but it's bad enough having to pay expensive insurance prewmiums, without finding that your insurance is not valid. You could complete your iVA satisfactorily, only to find yourself made Bankrupt through your inability to pay damages to a third party.
My suggested letter wording above provides a sure fire "belt and braces" confirmation that your insurance cover is sound, and the Insurer CANNOT then dismiss your claim on the grounds of non-disclosure. If they will not confirm this to you in writing, then it's time to move to an Insurer that will.
