/ Money

Is it fair that irrelevant details affect insurance claims?

Insurance claim form rejected

Hear the story about the woman who made a claim under her critical illness policy after being diagnosed with leukaemia? The insurer rejected the claim, as she didn’t disclose that she’d suffered from an ear infection.

Or the one about the man who made a claim under his critical illness policy after suffering from a heart attack? The insurer refused to pay up because he had failed to disclose unconnected problems with his back and neck when he applied for the insurance.

If you’re as astounded as me that this sort of thing can happen to people at their most vulnerable, let alone at all, you may be somewhat comforted to hear that things are about to change.

Insurance law is archaic and unfair

Currently, consumer insurance law is seriously outdated. Made up of various commercial cases dating back to the 18th century, it was designed to govern face-to-face insurance deals in the coffee houses of Georgian London.

It was never intended to cover today’s consumers. The result of this has been numerous cases, like those above, whereby people in need don’t receive payouts because they haven’t disclosed information that they had thought was irrelevant.

And it’s not just medical and life insurance that’s affected. If you’ve been burgled, but didn’t tell your home contents insurer that your house suffers from subsidence, they could refuse to payout even though the two are in no way connected.

Insurance law reform

However, there’s light at the end of the tunnel. Along with other consumer groups and insurance experts who have long campaigned on this issue, we’re celebrating the news that insurance law is at last going to be reformed.

Last week, the House of Lords introduced the Consumer Insurance (Disclosure and Representations) Bill, which is expected to be passed without objection. The onus will now be on insurance companies to ask consumers the right questions before they sell a policy. You’ll just have to make sure that you take reasonable care not to mistakes, though a payout will be refused if you’ve been found to have lied.

It may still be a couple of years until this comes into force, but at least from then on insurers will need to ask the right questions, the law will be fairer, and consumers will be much clearer about what is expected from them when they buy insurance.

Have you ever been refused an insurance payout because you didn’t disclose something you had thought was irrelevant? And do you generally find insurance forms confusing and unclear?


Never had an insurance application refused or had an insurance claim rejected – but I’ve always included all major illnesses and accidents from the age of 7 – (I have a page already written years ago updated as required) which I clip to the application. I’ve always assumed insurance companies will try to opt out of paying claims if they can.

The forms should certainly be made clearer – but in the past If I was not sure I rang up the insurance company for clarification – especially holiday insurance.

I’m not as organised as Richard but I do make enquiries if I am uncertain about what information is needed. Sometimes the answers have not been what I had expected, so the time taken has been generally well spent.

It is good news that they will have to ask the right questions. The next thing to tackle is the problem that some people are dishonest when applying for insurance. It’s not fair on the rest of us.

Angry Policyholder says:
10 June 2011

This story is terrible but not uncommon. We have been let down by an insurance company providing critical illness insurance. It took nearly 5 months to access our claim before we were turned down based on evidence that was wrong due to the company asking for current restrictions even though we had left the NHS care for some 2-4 months. Our claim was turned down without being assessed or measured and we were never asked to be even though our GP fully supported the claim. It took a year for us to get the correct information from the hospitals by asking them for the restrictions whilst under their care and we even received confirmation that one hospital had filled out the original forms wrong as we had given the wrong consultants name by mistake. This was not our fault as I was in 3 seperate hospitals for 3 months under various consultants.

We felt this new evidence would enable our claim to be paid out but was shocked when the insurance company used the information from the wrong consultant against us and said as I was not assessed there is no solid evidence I was ill. Seems to us they are happy to play the system with the intention to benefit the insurance company first and the policyholder second.

Many Insurance companies and Banks are franchising out to other companies not protecting our interest .This is now happening with disability car insurance they are usingfirms who have bullying workers This first happened with Nationwide [ my bank ] selling off leaving unprotected or pretending middle man without informing customers.
In this & last one concerns the key companiess who leave you in limbo if they are not treating fairly . As I am dyspraxic [ numbers coordination] too keys often main issue NB whichconversation on car keys

This involves a bunch of keys they agreed to pay for then when submitted £50 as had not mentioned dupliicates only want to pay £25 . Then Main Insurance who did this Fish because a Call Centre does not resolve fairly . All call centres do this .All pretend Managers get what you say then what they say then leave in limbo??!!

Councillors & MPs defrer to these adminbistrations rather than direct them because of …. Could it be deregulation . There is a a n issue with Camden & Islington refusing to loan scooters because employing workers who do not have cognitive ability to assess or address issues. So shopmobilitys are not fully used due LAs not addressing discretion disregarding Chronically Sick & Disabled Act 1970 [ Access to social services & parking] What does Disability Councillor do say that I am not his constituent when 2 councils joined to provide the service.