It is a requirement by law for all motor vehicles to have some form of insurance coverage before being allowed to traverse on the roadways. Such insurance coverage comes in various forms and at varied costs.

Many people are of the view that once they secure a comprehensive insurance policy for their motor vehicle then they are covered against all eventualities. This couldn’t be furthest from the truth.

An insurance contract is a good faith contract with speculations. As such, the requirement of good faith must be maintained at all times by the insured and the insurer. It is therefore imperative that the insured frankly discloses all material information and not misrepresent any material facts.

It is trite law that an insurance company can refuse to honour claims by insured parties if the policy was obtained by non-disclosure of material facts, or by a representation of facts that was false in a material way; irrespective of whether the policy is a fully comprehensive or third-party policy.

Some common examples of situations in which the court has ruled that the insurance company has a right to refuse to payout insurance claims are:

i) A motor vehicle which is insured for private and domestic purposes, but instead it is used habitually or normally to transport passengers for hire. (There is no requirement that at the time of the loss the vehicle was used for hire.)

ii) A motor vehicle which is insured for private and domestic purposes, but instead it is used habitually or normally to transport items pertaining to the owner’s business. Such as to transport the insured’s ice cream where he buys and sells ice cream. Again, there is no requirement that at the time of the loss the vehicle was used to transport ice cream.

iii) A motor vehicle insured solely in the name of one person but someone else has a beneficial interest in it because he/she contributed financially towards the purchasing of the vehicle but the insured failed to disclose this information when he entered into the insurance contract.

iv) The insured stated that the motor vehicle would predominantly be kept in a garage nightly but the vehicle is seldom or was never kept in a garage.

v) The motor vehicle is primarily driven by someone else apart from the insured person; even if the insurance policy is an open one where others are allowed to drive the said vehicle.

Additionally, it would be remiss of me not to highlight the fact that, after paying your car insurance diligently and your claim is rejected by the insurance company for breach of contract, you are not entitled to a refund of any premiums previously paid; therefore, be guided accordingly.

To avoid having your insurance claim denied by your insurance company for breach of contract, it is strongly recommended that you request a copy of your insurance policy and all associated documents that you either signed or ticked, from your insurance company and meticulously peruse same and advise yourself of what your policy allows or doesn’t. Where necessary, have your policy amended to reflect the actual usage of your motor vehicle. To better appreciate the content of your insurance policy and the implications, consult your attorney.

Clayton H Lawrence is an attorney-at-law. Send comments to the Jamaica Observer or Clawrence_legal@yahoo.com.