By John Grant
Most insurance policies are annual renewable contracts. This means that they run for a period of time, usually 12 months, and expire.
In some cases you may be offered renewal by the insurer but in most cases they are not obliged to do this. If they do offer to renew, you have obligations to tell them about any changes to the circumstances from when the insurance was last taken out or renewed.
Failure to follow these rules could be grounds for a claim to be declined.
Some policies have a clause saying that a renewal notice will be issued and in those contracts this provides an obligation on the insurer to do so. Policies without this clause can just expire without renewal being offered.
A company can offer renewal with whatever changes to conditions that it wishes to make. It is obliged to provide you with a complete list of terms and conditions changed, and renewal offered without these is done on the same basis as the current policy wording.
It is also very important for you to advise the company of any changes that have happened that may alter the risk for the next period of insurance. This could include such things as ...
- any convictions you have had since the insurance was taken out and even any charges you might have for cases not yet heard, particularly if they involve criminal or dishonesty issues
- any changes to your personal circumstances such as bankruptcy or financial difficulties
- changes to the ownership of property or new loans taken on items insured
- addition of new drivers particularly if they are younger people
These are only some examples, not an exhaustive list. Adopt a rule that says any circumstance that changes information that you have previously given the insurer must be declared to them or you are taking a risk of being in breach of the policy.
Also be alert for the terms offered on your policy. Most contracts are yearly even if they are paid monthly or fortnightly.
However some are truly monthly policies and renew with every payment made. This means an insurance company can vary the terms of the policy at any monthly or fortnightly renewal period.
If you are in doubt about your renewal arrangements then check with your insurance company and this may avoid issues developing when you have a claim.
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