A home insurance application often asks questions about security: what locks are fitted, whether an alarm is installed, and whether there has been a burglary before. The answers shape the premium and can shape whether a later claim is paid in full. In the UK, a specific statute governs how honest and careful those answers must be, and what an insurer can do if they turn out to be wrong.
The duty the Act places on the customer
The Consumer Insurance (Disclosure and Representations) Act 2012 applies across the UK and covers a “consumer insurance contract”: a contract of insurance between an individual who enters into it wholly or mainly for purposes unrelated to a trade, business or profession, and an insurer. A household contents or buildings policy bought by a homeowner for their own use is the typical example; a policy taken out for purposes related to a trade, business or profession falls outside the definition.
Section 2 sets the duty in one sentence: the consumer must take reasonable care not to make a misrepresentation to the insurer. The Act says this replaces any duty of disclosure that existed before it applied. In practice, the customer’s task is to answer the insurer’s questions with reasonable care rather than to volunteer everything they can think of.
What counts as reasonable care
Section 3 explains that reasonable care is judged in the light of all the relevant circumstances, and lists factors that may be taken into account. They include how clear and specific the insurer’s questions were, any explanatory material the insurer produced, and whether an agent was acting for the consumer. The standard is that of a reasonable consumer, adjusted for any particular characteristics of the actual consumer that the insurer knew or ought to have known about. A dishonest misrepresentation always shows a lack of reasonable care.
For home security this matters in a concrete way. A question such as “Are all external doors fitted with a five-lever mortice deadlock?” is specific. Ticking “yes” without checking that every door meets the standard may not amount to reasonable care. By contrast, a vague question gives the insurer less room to argue that the customer was careless. Readers wanting the underlying standards can see the guides to BS 3621 and insurer-approved locks and BS EN 50131 alarm grades.
Careless, reckless and deliberate answers
An insurer has a remedy only for a “qualifying misrepresentation”. Under section 4, that means a misrepresentation made in breach of the duty of reasonable care, and one that the insurer shows made a difference: without it, the insurer would not have entered the contract, or would have done so only on different terms. Section 5 splits qualifying misrepresentations into two types.
- Deliberate or reckless. The consumer knew the statement was untrue or misleading, or did not care, and knew the matter was relevant to the insurer, or did not care. It is for the insurer to show this. Schedule 1 says the insurer may avoid the contract and refuse all claims, and need not return premiums except where that would be unfair to the consumer.
- Careless. A qualifying misrepresentation that is not deliberate or reckless. The remedies depend on what the insurer would have done had it been told the truth. If it would not have offered cover at all, it may avoid the contract and refuse claims but must return the premiums. If it would have offered different terms, the contract is treated as if on those terms. If it would have charged a higher premium, it may reduce a claim proportionately, paying the percentage that the premium actually charged bears to the higher premium.
A worked illustration of the proportionate rule, based on Schedule 1: if the premium charged was £300 and the insurer would have charged £400, it need pay only 75% of a claim. The figures here are for illustration only.
Where the Financial Ombudsman fits in
The Financial Ombudsman Service’s page on home insurance lists complaints it sees in which an insurer says a customer carelessly or deliberately failed to give the true value of contents or rebuild cost, and has cancelled the policy. It also publishes a case study in which an insurer voided a policy after a burglary claim. These pages show the type of dispute that can follow a claim; they do not set out the outcome any particular complaint will have.
Practical steps before answering security questions
- Check each door and window against the standard the question names before answering.
- Keep receipts, installer certificates and photographs so the answer can be evidenced later.
- Tell the insurer when locks, alarms or cameras change, since the Act also covers variations to a policy, and a failure to respond to a request to confirm or amend particulars can itself be a misrepresentation.
- Compare what the insurer asks with what the site’s guide on home security and insurance costs says insurers look for.
Frequently asked questions
Does the Act cover business policies? The definition covers only contracts made by an individual wholly or mainly for purposes unrelated to a trade, business or profession.
Who must prove a deliberate misrepresentation? Section 5 says it is for the insurer to show that a qualifying misrepresentation was deliberate or reckless.
The bottom line
Across the UK, a household insurance customer must take reasonable care not to make a misrepresentation when answering questions about locks, alarms and security history. If the insurer can show a misrepresentation made a difference, its remedies range from proportionate claim reductions for careless answers to avoiding the policy for deliberate or reckless ones. Checking each answer against the actual installation is the simplest protection. This is general information, not insurance or legal advice.
Sources
- legislation.gov.uk, “Consumer Insurance (Disclosure and Representations) Act 2012, section 3 (Reasonable care)”
- legislation.gov.uk, “Consumer Insurance (Disclosure and Representations) Act 2012, section 5 (Qualifying misrepresentations: classification and presumptions)”
- legislation.gov.uk, “Consumer Insurance (Disclosure and Representations) Act 2012, Schedule 1 (Insurers’ remedies for qualifying misrepresentations)”
- Financial Ombudsman Service, “Home insurance”