Q:

Tweet

If I didn't declare an asthma condition to my insurance company, can they reject my claim for a related illness?

Insurance contracts are unique because they create a mutual intention between the insurance company and you to protect you in case of an unexpected tragedy. Both parties agree that you will pay in advance a particular premium to the insurance company, who in turn agrees to compensate you for any accidental loss or injury. So yes, the insurance company can repudiate the contract. The critical difference in insurance contracts is the element of uncertainty. It’s made for a specific yet uncertain event occurring and the insurance company ensures the protection by promising to give out a compensation that is itself uncertain. The key word is ‘risk’, for both sides. To alleviate the uncertainty, there must be some firm principles that insurance contracts rely on. One is that of ‘utmost good faith’. Non-disclosure of a material fact that affects the insurance company’s decision of contracting with you and fixing the premiums will affect the contract at a fundamental level. An insurance contract is not enforceable (i.e. you can’t claim on it successfully) if either party is found to be in breach of the principle of utmost good faith.

Unfortunately, on the face of it, you appear to you have breached this principle by failing to disclose a material fact (that you’ve been hospitalised). So yes, they can reject your claim and repudiate the contract. It does not matter that you genuinely thought you were cured. It’s important to cough up the truth, the whole truth and nothing but the truth, so help you.