Before you enter into a contract of insurance with an insurer, you have a duty, under the Insurance Contracts Act to disclose to the insurer every matter that you know, or could reasonably be expected to know, is relevant to the insurer's decision whether to accept the risk for insurance and if so, on what terms. You have the same duty to disclose these matters to the insurer before you renew, extend, vary or reinstate a contract of insurance.
A contract of insurance is a contract based on the utmost good faith, requiring each party to act towards the other party with the utmost good faith. You must disclose to us, facts known to you which are material to our consideration of your insurance risk.
You must be fully frank and honest and not disguise or leave
out information you know of, or suspect, that we rely on to base our decision
whether or not to insure you. Leaving out pertinent information is misrepresenting
your risk which could have the effect of voiding all your cover under this Policy.
It does not matter whether or not the insurance risk is intentionally or unintentionally
misrepresented, as either circumstance will void the insurance cover.
Your duty however does not require disclosure of any matter;
- that diminishes the risk to be undertaken by the
insurer;
- that is of common knowledge; and
- that the insurer knows, or, in the ordinary course of its enterprise/business,
ought to know;
If you fail to comply with your duty of disclosure, or misrepresent
your insurance risk to us, we will be entitled to reduce our liability in respect
of a claim or may cancel the contract. If your non-disclosure or similar act
is fraudulent, we may also have the option of avoiding this insurance contract
from its inception.