Alison Wright examines new consumer law implications for motor insurers & policyholders
The Road Traffic Act 1988 (RTA 1988) entitles an insurer to a declaration if it issues proceedings for a declaration within three months of the commencement of proceedings in which judgment is given and proves that the policy was obtained “by the non-disclosure of a material fact”.
“Material” is defined as “of such a nature as to influence the judgement of a prudent insurer in determining whether he will take the risk, and, if so, at what premium and on what conditions”.
Insurers often want an application to be made to obtain a statutory declaration that the motor insurer is entitled to void a contract of insurance with the policy holder on the basis of non-disclosure of material fact, commonly a failure to disclose previous driving convictions. In circumstances whereby the insurer would not have entered into the contract (or not in the same terms) if aware of the non-disclosure they are entitled to void the policy on the grounds of misrepresentation.
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