Understanding the disclosure obligations assumed by you as the insured and the insurance company when buying an insurance policy is very important. These obligations guarantee openness in the unjust insurance policy. When people know their rights and responsibilities and then engage in a legal contract, they will make decisions which are wise and stalls any possibility of disputes.
Disclosure Obligations of the Insured
Insurance provided under the policy, gives you the right to examine some critical information that usually is kept under wraps until the very last minute. Most of the insurance policies contain clauses that permit the insurer to refuse the insurance policy performance or reimbursement of the expenses within a certain period where some events occurred due to undisclised information by the policy holder. Examples of such important pieces of information include those disclosures:
Material Facts: You are required to disclose all material facts that may reasonably be expected to be detrimental to the insurance company’s decision in relation to coverage, and premium determination. Such facts include their medical history, driving records, claim history, etc.
Risk Factors: You are required to make such disclosures if you are involved in activities or have conditions that expose you to a higher risk of loss. More so, if you smoke, have a pre-existing medical condition or reside in a high-risk neighborhood for crime, such factors should be brought to the attention of the insurer.
Changes in Circumstances: When a policy has already been issued, and if changes occur later on, to be more specific say an address, occupation, or health changes, it is part of the responsibility of the policyholder to notify the insurer.
Consequences of Non-Disclosure
Notifying the insurer of material facts makes and has a huge effects to buyers. In this case, the insurance company may revoke the insurance cover in case it realizes that you were dishonest and hit something. This means that you may not be entitled to any benefits even where premium has been paid. You also may be convicted for such actions because fraudulently obtaining money from the company and making any false claims is also a crime.
Disclosure Obligations of the Insurance Company
Equally, all insurance companies have some obligations to make disclosures. You should be provided with clear and brief disclosures and other updates regarding the norms surrounding the insurance cover. These include:
Policy Documents: The policy which shows you the coverage, exclusions and limitations should also be availed to you by the insurance company within its policy document.
Important Disclosures: The Insurer in making a sale should sell any relevant information that could make you decline purchasing the policy such as any pre-existing medical conditions or any exclusions that may apply.
Premium Information: There is also premium information that the insurance company must inform you about, regarding the premium including other fees which can be charged.
Tips for Understanding Your Policy
In order to make you as much satisfied as possible with your insurance policy, this article presents the following suggestions:
Read the Fine Print: Always examine the entire policy documentation and in particular the fine print containing the lists of exclusions or limitations.
Ask Questions: Do not take anything about the policy for granted.
Seek Independent Advice: Joseph let an expert explain the clauses to him because the policy so complicated to read.
Conclusion
The duties to disclose information form one of the most critical aspects of each and every insurance contract. On the other hand, the insurance company also has rights and one of them is to disclose the available information and please one’s self. Hence, that will always make one be insured against having failures because of grabbing information.
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