Posted by Administrator on 04.07.16 in News
In summary, the Insurance Act 2015 means that insurance will be on the side of the buyer but offers no excuses for concealing information.
There has been much talk in the media recently about the Insurance Act 2015, which comes into effect on 12 August and has been described as “the biggest reform to insurance contract law in more than a century”. So, what is it all about, what does it mean for flat owners, and should you be concerned?
The good news for leaseholders, and indeed buyers of any other policy covered by the Act, is that it addresses the perceived bias in the law towards insurers. The Insurance Act 2015 updates the law on disclosure and misrepresentation. Until the new law takes effect, insured parties are required to disclose every circumstance that they knew, or ought to have known, which would influence an insurer in fixing a block of flats insurance premium or deciding whether to underwrite a risk. Sometimes, this meant that insured parties must predict what factors an insurer would be influenced by and a claim could be refused if they failed to do so accurately whether deliberately or otherwise.
In practice, there is still plenty of confusion about, say, what constitutes standard construction or how much you need to tell insurers about who is living in the building.
In regards to our block of flats insurance service, Flats Direct have always made a point of asking relevant questions to help our customers make full disclosure.
Meanwhile, other building insurance brokerswill have been frantically being playing catch up, because Part 2 of the 2015 Act has created a new ‘duty of fair presentation’ encouraging active, rather than passive engagement by insurers – they need to tell you what they need to know - as well as clarifying and specifying what matters should be disclosed.
This is not a one-way street. You will still be required to disclose every matter which they know, or ought to know, might influence the judgement of an insurer in deciding whether to insure the risk and on what terms; or at least to alert an insurer that it needs to make further enquiries about potentially material circumstances. What does “ought to know” mean? In practice, it is anything known by a person responsible for their block of flats insurance – for example, a resident’s management company director, a broker and/or a managing agent.
Talk to one of our specialists at Flats Direct to learn how to adapt to the Insurance Act of 2015 with block of flats insurance by calling 01202 862 660or 0800 731 6242 (Freephone).