J001010 - Lycetts Newsletter Jan 2024 LR - Flipbook - Page 13
Toby Heathcoat
Amory
Divisional Director,
Oxford
NO POLICY: FAILURE TO READ
TERMS OF TENANCY AGREEMENT
In this instance, a property owner had failed to read
the tenancy agreement he had in place with his
tenant. He believed that the requirement to insure
the property was transferred to the tenant but the
tenant believed the opposite and took legal advice. A
solicitor confirmed that, within the tenancy
agreement, the responsibility for insuring the
property lay with the landlord. When a significant
leak led to water damage, the landlord had no cover
in place and a claim could not be made. We would
always advise clients to check the terms of their
tenancy agreements and it is possible, where
insurance cover is placed by the landlord, for the
premium to be re-charged to the tenant.
ITEM NOT INCLUDED:
HOUSEHOLD INSURANCE
A client had placed his household insurance with
another broker and had failed to include personal
possessions cover to insure items such as his
wristwatch when away from home. When he was
involved in a traffic accident, his valuable watch was
damaged and it came to light that it was not covered.
As his vehicle insurance was with Lycetts he
mentioned in passing about the lack of cover for his
watch and the claims team picked up on this. They
pointed out that there was a small inner limit for
personal possessions in his motor policy and,
although this did not cover the full value of the watch,
he was able to claim up to the specified limit.
COMMUNIC ATION I S K E Y
At annual reviews it is all too easy to imagine that
simply renewing existing policies is sufficient. But
these reviews are an opportunity to re-evaluate
what is covered, to what level and under what
conditions. However, at any stage, it is important
to communicate with your broker to let them know
of any changes.
DOE S YOU R
I NSU R E R H AV E
A L L T H E FAC TS?
Material facts are key to the creation of any
insurance policy. It is these facts that insurers rely
upon to deliver a quote.
The definition of a material fact is ‘an item of information that
would influence (that is, induce), an insurer to accept a risk,
provide the extent of cover and the level of premium to be
charged.’
The law assumes that the insured knows everything about the
risk in question and the insurer knows nothing. Thus, the onus is
on the insured to provide the insurer with any information that
could lead to them declining the policy, changing the terms of
the policy, or charging a higher premium.
Examples of such information could be:
•
the correct policy-holder title;
•
the age of the policyholder;
•
convictions;
•
the construction of a property;
•
security measures; and/or
•
your claims history.
In the event of non-disclosure, insurers could potentially consider
a policy void, refuse to pay an individual claim or reduce the
amount of a claim. However, in such a situation it is up to insurers
to prove that they would have acted differently had they been
provided with all the material facts.
The responsibility for policyholders to disclose material facts
begins at the quote stage of any policy and continues for the
duration of the policy. As such, any changes to circumstances
during the policy period must be disclosed to insurers.
Many policies are based on a Statement of Fact document which
details the information on which insurers have based their terms.
It is vital that any policyholder checks this Statement of Fact
regularly to ensure the information remains accurate.
If you have any concerns about the disclosure of material facts,
please contact your Lycetts broker for advice.
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