Disclosure | WebInsure
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Disclosure sits at the heart of general insurance. Whether you are arranging new cover, renewing, varying a policy, or reinstating an expired policy, clear and accurate information helps an insurer assess risk and set terms. This page outlines what disclosure means in Australia, when it applies, and practical steps to help you prepare.
If you would like guidance tailored to your policy type, please contact our team: Get in touch with WebInsure.
Overview
Under Australian law, the information you provide when you take out or manage a general insurance policy can affect your cover. Two legal frameworks may apply, depending on the kind of policy:
- Consumer insurance contracts (for example, many home, contents, and personal motor policies): you must take reasonable care not to make a misrepresentation when answering an insurer’s questions. This means answering the insurer’s questions honestly, with reasonable care, and to the best of your knowledge.
- Other general insurance contracts (often commercial or specialised policies): you have a duty to disclose every matter that you know, or could reasonably be expected to know, that is relevant to the insurer’s decision whether to insure you and on what terms.
In both situations, it is important to read the insurer’s questions carefully, consider your circumstances, and respond accurately. If you are unsure about whether something is relevant, raise it with your adviser or the insurer. Transparency helps avoid misunderstandings later on.
There are limits to disclosure. Generally, you are not required to disclose information that reduces the risk, is common knowledge, is something the insurer already knows or should know in the ordinary course of business, or has been explicitly waived by the insurer.
Who needs to disclose and when
Disclosure obligations apply to the person entering into the contract and, where relevant, to anyone who will be covered by the policy or who is acting with authority on the insured’s behalf. This may include directors, partners, trustees, property owners, operators, or nominated drivers, depending on the policy.
Timing matters. You must meet your disclosure obligations before a policy is incepted, and again before renewal, extension, variation, or reinstatement. For some commercial policies, you may also need to notify the insurer of material changes during the policy period if your policy requires it (for example, new business activities or significant asset alterations).
Key risks and considerations
- Non-disclosure or misrepresentation may lead an insurer to reduce its liability for a claim, cancel the policy, or in cases of fraud, avoid the contract from the beginning.
- Incomplete answers can cause delays in claims assessment.
- Changes in risk profile—such as renovations 🛠️, occupancy changes 🏠, or adjustments in business operations—should be reported when relevant to the policy and its questions.
- Special conditions or exclusions may apply if new information comes to light that would have influenced the insurer’s original decision.
- Remember that for consumer policies, your focus is on taking reasonable care when responding to the insurer’s specific questions, while for other policies you may need to volunteer relevant information even if not directly asked.
How cover is typically structured
General insurance is usually documented in a schedule and a Product Disclosure Statement (PDS) or policy wording. These set out what is covered, what is excluded, limits and sub-limits, excesses, and your responsibilities. Endorsements may add, clarify, or limit cover. The insurer will also rely on your proposal responses or declarations as the basis of the contract.
Before binding cover:
- Consumer contracts: answer all questions posed by the insurer carefully and completely. If you do not understand a question, ask for clarification.
- Other general insurance: consider whether there is any additional information that a prudent insurer would reasonably want to know when deciding whether to insure you and on what terms.
At renewal or variation:
- Review any “changes since last year” questions and respond accurately.
- Disclose material changes such as new drivers, added locations, storage of hazardous goods 🚜, increased turnover, or changes in security measures.
- Confirm sums insured and limits still reflect your needs, including recent acquisitions or upgrades.
Claims and documentation
If you make a claim, you will be asked to substantiate your loss and explain the circumstances. Good record-keeping supports an efficient assessment. Depending on the policy and event, you may be asked for:
- Proof of ownership (invoices, receipts, valuations, photos 📋).
- Reports (police, fire, incident, repair assessments).
- Maintenance records, service logs, or tenancy agreements.
- Business documentation such as financial statements or stock records if the claim relates to a commercial policy.
Provide a clear, factual description of the incident. If new information emerges, update the insurer promptly. For safety-related matters, follow the relevant authority’s instructions first, then notify the insurer as soon as practical.
Common wording checkpoints
Policy wording can be technical. The following clauses commonly influence how disclosure interacts with cover:
- Information and changes in risk: sets out when and how you must notify changes.
- Reasonable care and prevention of loss: may require you to take practical steps to reduce risk or prevent further damage.
- Fraud: explains the impact of dishonest claims or statements.
- Exclusions and conditions: clarifies what is not covered, and any conditions precedent to cover.
- Endorsements and schedules: confirm tailored terms that may differ from the standard wording.
- GST and excesses: outlines how taxes and deductibles apply to claims.
Always read the insurer’s questions and the policy wording together. If the answer you provided to a question is later found to be incomplete or inaccurate, the policy’s remedies section will guide how the insurer may respond under the law.
Practical checklist 📋
Use this general checklist to prepare before seeking new cover, renewing, varying, or reinstating a policy. It is not exhaustive, and some items may not apply to your circumstances.
- Identify who is to be insured (individuals, entities, business names, trusts) ✅
- Confirm the activities and use of the property, vehicles, or equipment to be insured ✅
- List prior claims, incidents, or losses, including dates and outcomes ✅
- Record any previous policy cancellations, declinations, or special conditions ✅
- Note material changes since the last period (renovations 🛠️, occupancy changes 🏠, new locations, increased turnover, storage of hazardous goods 🚜) ✅
- Verify sums insured and limits reflect current replacement or repair considerations ✅
- Gather supporting documents (valuations, receipts, maintenance logs, photos) ✅
- Review security, alarms, and risk controls in place, noting any upgrades or downgrades ✅
Examples of relevant information
Depending on the policy type, relevant information could include:
- Property insurance: construction materials, age of wiring and plumbing, flood or bushfire exposure, heritage status, renovations and council approvals.
- Motor insurance: driving history, modifications, regular drivers, how and where the vehicle is parked.
- Business insurance: business activities, turnover and wage estimates, subcontracting, regulatory licences, equipment changes, and premises security.
- Liability insurance: nature of services provided, product changes, geographical spread, contractual indemnities, and work at height or in hazardous locations.
If in doubt about whether a fact is relevant, raising it allows the insurer to advise whether it affects the risk.
What happens if disclosure goes wrong
The law provides a range of remedies where information given to the insurer is incomplete, inaccurate, or misleading. The response depends on the type of contract