legal corner by Owen Hill of Wollen Michelmore Solicitors
When I said “uberrimae fidei” my client said “to you too” T
his ancient Latin phrase is the bedrock of modern insurance law and is the motto of Lloyds of London. It means that there is a duty of the utmost
good faith between parties to particular types of contracts and the most obvious application is to the every day process of buying insurance.
The effect of established law is that there is no point in paying a premium to an insurer without providing full and complete disclosure of all relevant matters. Telling half the story may produce a cheaper premium but this is a false economy because the policy will be avoidable by the insurer.
As soon as it comes to light that the insurer was not made aware of matters that would have been taken into account when fixing the premium, then the insurer is entitled to assert that the insured was in breach of the duty to disclose
Wollen Michelmore SOL I C I TOR S
The South Devon Law Firm
and that the insurer has no liability under the contract. The insurer is not obliged to reimburse any premium paid either.
There have been cases taken to court where the insured has admitted that material facts were not disclosed but claimed that the insurer should still pay out because the disaster that arose was not related to the issues that were kept from the insurers. The courts have consistently decided that there is no sympathy for the insured. The failure to act in the utmost good faith means that the insured does not get a penny.
The implications are most obvious in relation to car insurance because you would not expect an insurer to have to pay out for some one who concealed, for example, previous driving offences. The impact is less obvious in relation to property insurance where most of us tend to think in terms of ‘comprehensive risks’, when in fact the cover is usually specifically for fires, floods, lightening etc This all came to mind when my client was about to complete a property purchase on a second home. They came into sign the papers and casually mentioned that the builders would be in for a few months before they put it with an agent for holiday lets. They told me that they were going to arrange their insurance for the property by using one of the comparison websites.
The experience, dedication and values to support you, your family and your business
Instead, they then found a broker who arranged bespoke cover for the property on the basis that it would be a building site for a while and then a second home with a letting business on the side. They told me that whilst the premium was twice the price of the cheapest basic quote on the comparison websites they were, however, sleeping well at night.
Torquay • Newton Abbot • Paignton • Dartmouth
www.wollenmichelmore.co.uk
This firm is regulated by the Solicitors Regulatory Authority (No.563758)
And to finish, you may have noticed our name has changed. We’ve merged with Harold Michelmore of Newton Abbot to become Wollen Michelmore, giving you a greater span of expertise and us a bigger presence across South Devon. Dartmouth office 01803 832191
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