What is Duty of Disclosure in Car Insurance?

You may or may not have heard of duty of disclosure in car insurance – or any type of insurance really. In many ways the phrase ‘duty of disclosure’ is shorthand for saying, ‘honesty is the best policy’. It’s all about what you tell your car insurance provider so they can give you the proper protection.

In car insurance, honesty is the best policy when taking out a policy and when making a claim. After all, honesty is the foundation of every good relationship and your relationship with your insurance provider should always be built on a solid foundation.

In this article, PD Insurance explains what a duty of disclosure means and why it’s worth it (and a legal requirement).

Duty of disclosure meaning

Duty of disclosure is exactly what it sounds like. It’s about full disclosure of facts relating to you as a driver with your car insurance provider. And because car insurance is about keeping your finances safe, and insurance is a regulated service, you have a duty to make such a disclosure.

Duty of disclosure is a two-way street

Not to worry, the onus of disclosure isn’t a one-way thing. Just as you need to make your car insurance provider aware of your details, your car’s details and your driving history details, your insurer also needs to disclose what’s covered and what’s not by your car insurance.

Essentially, duty of disclosure is about putting the relevant facts on the table so your car insurance provider can give you the best and most suitable premium. And it ensures you can make successful claims because all your information is factual and true.

Why is disclosure important in car insurance?

We all know that car insurance is all about protecting our finances in case of car related incidents that can otherwise eat up our savings. But have you ever wondered how your car insurance provider is able to tailor your premium to best suit you? Or how they’re able to decide when a car insurance claim is payable?

Being transparent with your car insurance provider is part of this process. And it’s a big part. There are teams that work hard behind the scenes in car insurance, crunching numbers and cross-referencing your data to make your premium low and ensure every eligible claim is processed and paid.

Duty to not misrepresent

Without accurate information from you, your car insurance protection could falter. In other words, if you aren’t transparent and honest with your provider and this comes to light your claim might be rejected. Or a lesser amount might be paid. Or your car insurance plan could cancelled altogether.

In other words, unless you’re not completely honest in your duty of disclosure, you may no longer be eligible for the protection car insurance provides. Being completely transparent and giving a full duty of disclosure is also required by law.

Examples of duty of disclosure in car insurance

You might be wondering what type of information duty of disclosure covers when it comes to car insurance. Not to worry, it’s all very basic and very much about your driving lifestyle. In other words, the type of information you’re dealing with is simply what makes the wheels go round when it comes to the protection you get from car insurance.

Here are some examples of duty of disclosure:

1. Your basic information

First things first, ensuring your car insurance provider has accurate information about you and your vehicle is vital. This includes your name, address, contact details and driver’s license information.

It might sound like common sense, but missing or incorrect details could lead to complications down the line, such as delayed claims or even policy cancellations.

It’s also worth putting a bi-annual reminder in your calendar to check and update any changes to these details.

If you move house or change jobs for instance, this affects where you park and drive. Another phrase for updating your information as it relates to your car insurance policy is a car insurance endorsement.

2. All about your car

When it comes to the nitty-gritty of your car, your duty of disclosure to your insurance provider includes some basic information.

Whether you’re driving a zippy little hatchback or a sturdy SUV, let them know the make and model of your vehicle. This helps determine the cost of repairs and replacement parts. This is super important to making sure your premium is correct and that you can claim enough for repairs for accidental damage.

It also ensures that your premium covers you in case you need to replace your car for complete write-off or theft. Find out how to make a comprehensive car insurance claim – it’s easy!

3. Driving history

Your driving history plays a significant role in determining your car insurance premiums. So, it’s crucial to disclose any past accidents, claims or driving violations. Remember, your insurer has the right to access this information through various databases so being honest upfront will save you from potential headaches later on.

This is one area where people are likely to falter – but it’s seriously not worth being embarrassed about past driving misdemeanors – this is full disclosure. Your driving history is a crucial part of your car insurance duty of disclosure. Without it, your insurance provider may be hamstrung when it comes to paying your car insurance claim.

4. Vehicle modifications and changes

Did you recently install a new sound system, upgrade your rims or add a fancy spoiler to your car? While these modifications may make your vehicle cooler, they also need to be reported to your insurance provider.

Failure to disclose modifications can result in denied claims or reduced payouts in case of an accident involving the modified parts. Additionally, if you sell your car or purchase a new one, inform your insurer promptly to adjust your policy accordingly.

Whether or not it’s the case, some modifications can change the safety of your car. Regardless, they always need to be communicated as part of your duty of disclosure in car insurance. Both when you start your policy and whenever you make changes.

5. Intended use and mileage

Your car insurance premiums are often based on how you use your vehicle. Do you use it for personal, business, or commercial purposes? If you plan to use your car for business purposes, such as deliveries or transportation services, you must inform your insurer.

Not all car insurance providers cover commercial vehicles, so this is an important part of your duty of disclosure because you’ll need the right provider for your circumstances.

Similarly, your expected annual mileage can also affect your policy. Be honest about how much you drive to ensure your coverage aligns with your needs.

6. Medical conditions and additional drivers

If you or any additional drivers named on your policy have specific medical conditions, it’s crucial to disclose them to your insurer. Certain medical conditions can impact your driving ability and may require additional coverage or special provisions.

Failure to disclose these conditions such as driving with diabetes or epilepsy can void your policy in case of an accident. Remember, honesty is always the best policy!

While these are some of the main aspects of duty of disclosure as pertains to your car insurance, this isn’t an absolute list. Anything you’re aware of that could be relevant to your car insurance cover is worth disclosing when buying or renewing your policy.

Choose award winning car insurance today

When it comes to duty of disclosure in car insurance, honesty truly is the best policy. By fulfilling your duty of disclosure, you ensure that your cover accurately reflects your circumstances. This means you really protect your vehicle and finances when you need it most.

Choose from three different types of car insurance and select the cover that suits you and your pocket. Our award winning car insurance is low-cost and high value so you can drive with peace of mind. Click below to get a quote today.