Mortgage Sorter | Non-disclosure

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Non-disclosure

If you buy a protection or insurance product such as life insurance, critical illness or payment protection insurance alongside your mortgage, the person selling it to you will ask a number of questions about your health and lifestyle.

'Non-disclosure' occurs where an applicant does not tell an insurer a fact, which would have led to a different underwriting outcome - typically an increased premium, exclusion or refusal to insure.

Forgetting to mention a minor health issue such as headaches, a smoking habit or occasional pins and needles, could mean that your policy won’t pay out due to non-disclosure - even if your illness or condition is unrelated.

Non-disclosure is one of the most common reasons for a policy not paying out so it is best to always be honest when asked questions by a mortgage or insurance sales adviser.

Non-disclosure can be a controversial area as insurers, who can reject claims where information material to their assessment of taking on a proposal has been left out, make fine judgments as to whether an omission was innocent, reckless or outright deliberate.

About one in ten claims are rejected for non-disclosure.

In practice, insurers generally pay out on claims where the policyholder has innocently or inadvertently left out information but they come down heavier on customers who they feel deliberately omitted important information.

To read more on this subject please see the list below or your mortgage guide or your home buying guide

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