Insurance policy is an contract between policy holder and insurance company. These contracts are based on utmost good faith which means standard of honesty required to satisfy these contracts are much more demanding and all material facts must be disclosed. When unsure about insured claims, insurers are allowed to look into them. However, they must do it in a way that shows their good faith. As long as the insurer is not being intentionally blind to prove their position and interests, further inquiry into prospective claims is acceptable. There has been lot of investigations and lot of claims got denied over the last few years due to the following reasons:

1. Wrong garaging location in case of an auto insurance policy

This is very common example as auto insurance is quite expensive and people try to save on insurance using wrong address where insurance rates are low. Further, Sometimes insured don’t even have knowledge about what they doing as they are being guided by some in knowledgeable person who they consider as brokers/agents. There are lot of people in communities especially new immigrant communities where these people who are not licensed broker or employee of an insurance company but they will act as if they are brokers or employees of an insurance company and can get them better rates. Regardless, how they bought coverage if a claim happens it can be denied outright and or your policy may be cancelled for material misrepresentation. which can be a serious conviction and you will be in high risk insurance company for next 3 years.

Make sure your address on insurance application is current and accurate reflection of the address where you reside and is the principal garaging address of your vehicle.

You must update your insurance broker about change of address promptly. So, to update your insurance policies to reflect the new and correct garage location. An insurer may ask to provide proof of primary residence in a format satisfactory to insurer. Moreover, If the insurance company establishes a reasonable belief the primary address listed on the signed insurance policy application and documented within this declaration is not the current and actual location. where the insured vehicle(s) are normally kept and parked the majority of the time, your Insurance policy can be voided, cancelled or claim denied due to material misrepresentation.

2. Not disclosing all the licensed drivers

Often people will try not to disclose all drivers in household and or business which is a major underwriting question on auto insurance application .e.g. people will often try not to disclose young drivers in household or spouse with bad driving history.

3. Unrepaired damages

If you have an unrepaired damage to your vehicle at the time of an insurance application/Insurance Contract you must disclose it to your insurance broker. Furthermore, As non-disclosure of unrepaired damages before getting insurance contract is a fraud and policy can be cancelled due to misrepresentation.

4. Use of Vehicle must be correct in Insurance Contract

If you use your vehicle for business and or commercial use it must be disclosed immediately at the time of application or if the use changes after the policy ahs bene issued.

5. Equipment in Vehicle

What you carry in your vehicle is another factor in case of commercial auto policy and this fact must be disclosed truthfully.

6. Vehicle Distance travel

Radius of operation is another major underwriting factor and must be disclosed truthfully.

7. Claims and convictions to be disclosed in Insurance Contract

Claims and convictions must be disclosed at the time of application truthfully.

It is an offence under the Insurance Act to knowingly make a false or misleading statement or representation to an insurer in connection with the person’s entitlement to a benefit under contract of insurance, or to willfully fail to inform the Insurer of a material change in circumstances within 14-days,in connection with such entitlement.