When applying for insurance, there is a legal duty to take reasonable care not to make a misrepresentation to the insurer before the contract of insurance is entered into.
A misrepresentation is a false answer, an answer that is only partially true, or an answer which does not fairly reflect the truth. This duty also applies when making changes to existing insurance, and reinstating insurance.
If you do not meet your duty
If you do not meet your legal duty, this can have serious impacts on your insurance. Your cover could be avoided (treated as if it never existed), or its terms may be changed. This may also result in a claim being declined or a benefit being reduced.
Please note that there may be circumstances where, after your cover starts, we later investigate whether the information given to us was true. For example, we may do this when a claim is made.
Guidance for answering our questions
You are responsible for the information provided to us. When answering our questions, please:
Think carefully about each question before you answer. If you are unsure of the meaning of any question, please ask us before you respond;
Answer every question;
Answer truthfully, accurately and completely. If you are unsure about whether you should include information, please include it; and
Review the answers you've provided in your application carefully including where someone else helped prepare your application (for example, your interpreter). If necessary, let us know if you need to make any corrections as soon as possible.
Changes before your cover starts
Before your cover starts, we may ask about any changes that mean you would now answer our questions differently. As any changes might require further assessment or investigation, it could save time if you let us know about any changes when they happen.
If you need help
It’s important that you understand this information and the questions we ask. You can ask us or seek assistance from a financial adviser for help if you have difficulty understanding the process of buying insurance or answering our questions.
If you’re having difficulty due to a disability, understanding English or for any other reason, we're hereto help and can provide additional support for anyone who might need it. If you want, you can have a support person you trust with you.
Notifying the insurer
If, after the cover starts, you think you may not have met your duty, please contact us immediately and we’ll let you know whether it has any impact on the cover.
What can we do if the duty is not met?
If the person who answers our questions does not take reasonable care not to make a misrepresentation, there are different remedies that may be available to us . These are set out in the Insurance Contracts Act 1984 (Cth). These are intended to put us in the position we would have been in if the duty had been met.
For example, we may:
avoid the cover (treat it as if it never existed);
vary the amount of the cover; or
vary the terms of the cover.
Whether we can exercise one of these remedies depends on a number of factors, including:
whether the person who answered our questions took reasonable care not to make a misrepresentation.This depends on all of the relevant circumstances. This includes how clear and specific our questions were and how clear the information we provided on the duty was.
what we would have done if the duty had been met – for example, whether we would have offered cover, and if so, on what terms
whether the misrepresentation was fraudulent; and
in some cases, how long it has been since the cover started. Before we exercise any of these remedies, we will explain our reasons, how to respond and provide further information, and what you can do if you disagree.