What Counts as Non-Disclosure and How It Voids Your Claim

Insurance is a contract of utmost good faith. This legal principle places a higher duty of disclosure on the insured than in most other contracts.

What Must Be Declared

The Full Scope of Disclosure

You must declare any condition for which you consulted a doctor, received treatment, took medication, or had diagnostic tests done in the past 36 months. This includes conditions that were minor, borderline readings that required no medication, and conditions that have since resolved. Also declare smoking, alcohol, hazardous occupation, and any previous insurance proposals declined or loaded.

Rule of thumb: If you are unsure whether to declare something, declare it. The worst outcome of full disclosure is a slightly higher premium. The worst outcome of non-disclosure is a voided policy with no refund.

How Insurers Investigate

What They Check During Claim Processing

For significant claims, insurers investigate: hospital records from all facilities visited, pharmacy purchase databases, diagnostic lab records, shared industry claim history databases, and publicly available social media profiles.

Social media: It is legally permissible for insurers to review publicly available information. Photos inconsistent with a claimed injury have been used as grounds for repudiation.

Consequences

What Happens When Non-Disclosure Is Found

If non-disclosure is established, the insurer can repudiate the specific claim, void the entire policy from inception with forfeiture of all premiums paid, and in fraud cases pursue legal action for recovery of claims already paid.

After 5 years: The moratorium period protects you after 60 continuous months of coverage. Post-moratorium, insurers can only repudiate on grounds of established fraud.

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