There's an unfair term in my insurance policy, can I challenge it?
When you take out an insurance policy, you agree to be bound by the terms and conditions. But standard clauses may be challenged if they're considered to be unfair.
Interpretation of insurance clauses
Often it's the interpretation of a clause which is crucial.
It's up to the insurer to make sure that their policies are clear. If they fail to do so, they run the risk of the clause being interpreted in the policyholder's favour.
Under the FCA Handbook of Rules and Guidance, insurance companies must communicate information to you which is clear, fair and not misleading.
If an exclusion clause contained in your policy is ambiguous, then that ambiguity must be interpreted against the insurance company, and in your favour.
So the interpretation which favours you is the one that should prevail in such a case.
If the insurance company sticks to its own interpretation, then you should inform your insurer that you wish to refer the matter to the Financial Ombudsman Service (FOS).
However, a term is not necessarily unfair just because it looks to be unfair. It depends on the precise details of the contract as a whole.
It is often the interpretation of a clause which is essential
However, a term is not necessarily unfair just because it looks to be unfair. It depends on the precise detail of the contract as a whole.
Under the both the Consumer Rights Act and the Unfair Terms in Consumer Contracts Regulation 1999 a term is unfair if, contrary to the requirements of good faith, it causes a significant imbalance between your rights and the obligations of the firm, to your detriment
When you signed your insurance contract will decide which legislation applies:
If you agreed your insurance contract before 1 October 2015 than the Under the Unfair Terms in Consumer Contracts Regulation 1999 applies.
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