Insurance contracts by their nature are usually quite long and complicated. It is tempting to be complacent and not thoroughly read through them, especially if you have multiple insurance policies covering different types of risk and your policies always seem to say the same things. This puts you in danger of being surprised by unfamiliar conditions in your policy. Although you should always take it upon yourself to educate yourself about your policy, the law may help you if an insurer relies on an ‘unusual term’ without specifically drawing your attention to it.
If an insurer wants to include a term that is ‘unusual’ they must notify you in writing and clearly inform you of the effect of the provision before you enter into the contract.
This notification could be by a letter describing the provisions or even by a copy of the contract which draws your attention to the unusual term. The notification must identify the unusual term and clearly explain its effect. Therefore, it’s important to thoroughly read any correspondence or documents provided by your insurer and contact them if you don’t understand their significance.
What constitutes an unusual term?
A term can be unusual either in itself or it could be unusual for it to be included in that particular type of insurance contract. Commonly, this includes unusual exclusion clauses or clauses which atypically address common subject matter. For example, it might be considered unusual for a home contents insurance to have an exclusion about existing illnesses and disabilities (a standard concern for health insurance). What constitutes an unusual term will depend on the facts of the case and what is the standard cover for particular types of insurance contract.