Criminal conviction insurance is a necessity, but what business is it of an insurer whether or not you have any type of criminal conviction?
Insurers will say that the main focus of their work is assessing risk and that a criminal conviction is an important indicator when calculating those risks – past motoring offences are held to reflect a greater propensity for claims under a motor insurance policy, for example, whilst a conviction for arson or for offences of dishonesty may have a direct bearing on an individual’s proposal for home insurance.
Guidance from the Association of British Insurers (ABI) urges members to take into account only those convictions that may be relevant to the kind of cover for which application is being made. The charity for people with convictions, Unlock, however takes a contrary view and believes that insurance for those with criminal convictions frequently makes indiscriminate reference to any conviction.
The result is that many individuals searching criminal conviction insurance for their home or car have their application rejected or find that they are paying more than the usual price for their premiums.
You are obliged to disclose any criminal conviction to a prospective insurer however minor it may be. This extends not only to time in prison but even fines for such relatively minor offences as speeding or dropping litter. Cautions, reprimands or final warnings issued by the police are not criminal convictions and you do not need to disclose them.
The good news, however, is that there are providers specialising in criminal convictions insurance – and this is one of our areas of experience and expertise here at GSI Insurance.
Rehabilitation of Offenders Act, 1974
The further good news is that sooner or later the law considers that you have paid the price for any criminal conviction and you are treated as though the offence had never been committed. The Rehabilitation of Offenders Act, 1974, as amended, sets out the periods that need to be completed for any offence to be rehabilitated – or “spent”. When it is spent, you have no obligation to disclose the conviction – including any prospective insurer.
Whilst any convictions remain unspent, however, you have a legal duty to disclose them when asked – when making application for insurance for instance. In this case, an insurer may consider any conviction to be a “material fact” affecting the assessment of risk. The disclosure of all material facts is an established principle bound up in the requirement for so-called “ultimate good faith” in any insurance contract.
With respect to criminal convictions, your duty to disclose them applies to anyone who may be covered by the insurance for which you are applying – in the case of motor insurance, therefore, anyone who is a named driver on the policy and in the case of home insurance, any resident member of your household.
Failure to disclose unspent criminal convictions
Your failure to disclose material facts to your insurer may result in the rejection of any claim you subsequently need to make. If the claim has already been settled, you might also be required to repay the money paid out without appropriate criminal conviction insurance in place.