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INSURANCE CONTRACTS ACT 1984 - SECT 21 The insured's duty of disclosure

INSURANCE CONTRACTS ACT 1984 - SECT 21

The insured's duty of disclosure

  (1)   Subject to this Act, an insured has a duty to disclose to the insurer, before the relevant contract of insurance is entered into, every matter that is known to the insured, being a matter that:

  (a)   the insured knows to be a matter relevant to the decision of the insurer whether to accept the risk and, if so, on what terms; or

  (b)   a reasonable person in the circumstances could be expected to know to be a matter so relevant, having regard to factors including, but not limited to:

  (i)   the nature and extent of the insurance cover to be provided under the relevant contract of insurance; and

  (ii)   the class of persons who would ordinarily be expected to apply for insurance cover of that kind.

  (2)   The duty of disclosure does not require the disclosure of a matter:

  (a)   that diminishes the risk;

  (b)   that is of common knowledge;

  (c)   that the insurer knows or in the ordinary course of the insurer's business as an insurer ought to know; or

  (d)   as to which compliance with the duty of disclosure is waived by the insurer.

  (3)   Where a person:

  (a)   failed to answer; or

  (b)   gave an obviously incomplete or irrelevant answer to;

a question included in a proposal form about a matter, the insurer shall be deemed to have waived compliance with the duty of disclosure in relation to the matter.