Good underwriting enables insurers to avoid a claim

Published on
2 min read

This article outlines the outcome of the decision in the case of Jones v Zurich Insurance.  

The matter involved a Mr Jones who took out an insurance policy to cover his Rolex watch, valued at £190,000.

In the insurer’s proposal forms, Mr Jones confirmed he had not made any claims, or suffered any losses, in the five years preceding the proposal. However, that was untrue. In fact, he had made a claim against another insurer following the loss of a diamond from his ex-girlfriend’s ring two years earlier.

Insurers sought to avoid the claim on the basis that Mr Jones had failed to take the reasonable care required of him under the Consumer Insurance (Disclosure and Representations) Act 2012 and as a result had mispresented the position on the proposal form.

The court considered;

  1. whether the insurers would have insured the watch had they known the true position
  2. whether Mr Jones’ misrepresentation was either:

         a. deliberate

         b. reckless, or

         c. careless

Mr Jones was found to have been careless in his representations. Insurers were able to show they wouldn’t have insured Mr Jones had they known about the previous loss of jewellery.  They successfully avoided the claim and returned his premium.

Consumer insurance contracts impose a high burden of proof upon insurers who want to argue they would not have accepted a risk following a claim after inception of the policy. However, in this instance insurers were able to overcome that burden. With well documented records, particularly in relation to their initial assessment, they were in a strong position to avoid and did so.

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