Recently we became aware of a client that insured a dwelling directly with an insurer. The client completed the declaration questions and advised the insurer that he had signed up a lease and the property would be occupied by tenants. Six months later the client decided to sell the property and the tenants moved out. For the last three months, the real estate agent has been conducting open homes every weekend, however last weekend when they entered the property the house was flooded. The client contacted his insurer to make a claim only to have the claim declined due to the non-disclosure of two material facts: • The occupation of the property had changed from tenanted to vacant • The home had been vacant for more than 60 days (limit in the policy)
This highlights the importance of disclosure during the term of insurance, not just when applying for the policy. When a non-disclosure occurs legally, your policy can be treated as though it never existed (it has been ‘avoided’) and your insurer can refuse to consider your claim. Even if you left out the information on the application unintentionally, the insurer can still avoid your policy. If your policy is avoided, it can affect other claims you might have made under the policy and the success of future insurance applications. This is why it is so important to give your insurer or broker all information. If you would like a review of your insurance policies or more information about this topic please don’t hesitate to get in touch with BrokerWeb Risk Services on 0800 644 444. REDi Builders’ Insurance is administered by BrokerWeb Risk Services Limited and is exclusive to NZCB members. For a free review of your existing portfolio, you can contact BrokerWeb Risk Services on redi@bwrs.co.nz or 0800 644 444.
New issue coming soon! Look out for REVERE Volume Four showcasing the amazing work and talent of our members. All enquiries to Julie: julie@nzcb.nz
