When you buy or renew insurance in New Zealand, you have a legal duty to share certain information with your insurer. Getting this wrong can mean a declined claim or a cancelled policy. This guide explains what you need to disclose, how the rules will change under the Contracts of Insurance Act from November 2027, and how to get it right.
The duty of disclosure is a legal obligation that applies when you buy or renew an insurance policy in New Zealand. In simple terms, it means you must give your insurer honest and complete answers to their questions, and not withhold information that would affect their decision to insure you or the terms they offer.
Insurance works on the principle of good faith. Your insurer is pricing your policy based on the information you provide. If that information is incomplete or inaccurate, they may end up covering a risk they did not agree to - and that can cause serious problems if you need to make a claim.
The duty of disclosure applies to all types of personal insurance - car, house, contents, health, travel, life, and others. It applies at the point of purchase, at renewal, and any time you make changes to your policy. It also applies to everyone named on the policy, not just the person who fills in the application.
Right now, the rules around disclosure in New Zealand place most of the burden on the consumer. That will change on 15 November 2027, when the Contracts of Insurance Act 2024 comes into force and shifts to a fairer model that better reflects how insurance is actually bought and sold. Until then the current rules apply, so it is worth understanding both.
For decades, and still today, New Zealand's insurance disclosure rules have come from common law principles and the Insurance Law Reform Act 1977. Under these current rules, policyholders have a broad duty to volunteer any information that a "prudent insurer" would want to know - even if the insurer never asks about it. This puts the burden squarely on the consumer to guess what might be relevant, and it continues to apply until 15 November 2027.
The Contracts of Insurance Act 2024 will replace this with a more balanced framework from 15 November 2027. For consumer insurance contracts (personal policies like car, house, contents, health, and travel), the "volunteer everything" duty will be replaced with a duty to take "reasonable care" not to make a misrepresentation. In practice, you will need to answer your insurer's questions honestly and to the best of your knowledge, and the insurer will carry the responsibility to ask the right questions.
This is a significant shift. Under the current rules, an insurer can decline a claim because you failed to mention something they never asked about. Under the new rules, if the insurer does not ask a clear question about a topic, it will be much harder for them to penalise you for not volunteering that information.
The comparison below sets out the key differences between the current and new disclosure duties. Understanding this shift is helpful context for knowing your obligations and your protections as a policyholder.
It is worth noting that for non-consumer contracts (such as business or commercial insurance), a broader duty of disclosure will continue to apply after 2027. The new "reasonable care" standard is specifically for personal insurance policies. The Act's commencement date of 15 November 2027 was confirmed by the Government in 2025.
A material fact is any piece of information that would influence an insurer's decision to offer you cover, or the terms and price of that cover. In other words, if knowing something would make an insurer think differently about insuring you, it is material.
Under the current rules, you have to work out what is material on your own, so it pays to think beyond the questions on the form. From 15 November 2027, under the Contracts of Insurance Act 2024, the insurer will be expected to ask you about the things they consider material, and your job will be to answer those questions honestly and completely.
That said, it is still helpful to understand the kinds of information that insurers typically treat as material. This gives you context for why certain questions appear on application forms and helps you provide thorough, accurate answers.
For car insurance: your driving history (including accidents, claims, and traffic convictions), licence type and how long you have held it, who else will drive the vehicle, where the car is parked overnight, any modifications to the vehicle, and whether the car is used for business purposes.
For house and contents insurance: the age and condition of the property, building materials and construction type, whether the property is in a flood or earthquake zone, any previous claims or damage, security features, whether the property is tenanted, and any home-based business activities.
For health and life insurance: your medical history (including past diagnoses, treatments, medications, and family medical history), smoking status, occupation, lifestyle activities (such as hazardous sports), and travel plans.
The key principle is honesty. If your insurer asks a question, answer it fully and truthfully - even if you think the information might work against you. Failing to do so can have much worse consequences down the line.
Disclosure questions can feel straightforward on the surface, but real life is often more complicated. Here are some of the most common scenarios where policyholders run into difficulty, along with guidance on how to handle them.
These scenarios come up regularly in complaints to the IFSO and are among the most common reasons for claim disputes in New Zealand. Getting them right at the application stage saves a lot of trouble later.
Travel insurance is where disclosure most often goes wrong. Most policies ask about pre-existing medical conditions when you buy, and a condition you did not declare can lead to a declined claim overseas, so answer those questions fully when you compare travel insurance. Some funeral insurance works differently, because policies sold with guaranteed acceptance ask no health questions and instead apply a waiting period before death from illness is covered.
| Scenario | What You Should Do | Why It Matters |
|---|---|---|
| You had a minor health issue years ago and are not sure if it counts | Disclose it. Answer the insurer's health questions fully, including past conditions even if they seem minor or resolved. | Insurers assess risk over time. A condition you consider minor may affect underwriting. Failing to mention it can lead to a declined claim later. |
| You have a driving conviction (e.g. speeding, drink driving) that is several years old | Disclose it if the insurer asks about your driving history. Check the timeframe they specify - some ask about the last five years, others longer. | Driving convictions are a key factor in car insurance pricing and acceptance. Non-disclosure of convictions is one of the most common reasons for claim declines. |
| Your house has a known issue (e.g. weathertightness problems, subsidence, previous flood damage) | Disclose it when asked about the property's condition or history. Be specific about what happened and any repairs carried out. | Property condition directly affects the risk the insurer is taking on. Undisclosed property issues can void your cover entirely. |
| Someone else will regularly drive your car but you only listed yourself | Add them to the policy or disclose them when asked about regular drivers. This includes partners, flatmates, or adult children. | If an undisclosed driver has an accident, the claim may be declined. Some policies cover occasional drivers, but regular drivers usually need to be named. |
| You started using your vehicle for business deliveries or rideshare | Tell your insurer. A change in vehicle use from personal to commercial is a material change that needs to be disclosed. | Personal car insurance typically excludes commercial use. If you have an accident while doing deliveries without the right cover, your claim is likely to be declined. |
| You forgot to mention something on your original application | Contact your insurer as soon as you realise. Most will allow you to update your information. It is better to correct it now than face problems at claim time. | Correcting an honest mistake promptly shows good faith and reduces the risk of a non-disclosure finding later. |
| You are not sure what a question on the application form means | Ask the insurer to clarify before answering. Do not guess or leave it blank. Keep a record of the clarification. | If a question is ambiguous and you answer it reasonably based on your understanding, the new rules from November 2027 are more likely to protect you - but it is still better to seek clarity upfront. |
| Your circumstances changed after you took out the policy (e.g. new medical diagnosis, new driver, renovation) | Check your policy for notification requirements. Most policies require you to tell your insurer about significant changes during the policy period. | Changes during the policy period can affect your cover. Failing to notify your insurer may give them grounds to reduce or decline a claim. |
Under the current rules, the consequences of non-disclosure can be harsh. If you fail to disclose a material fact, even innocently, your insurer may be able to avoid (cancel) the policy from the start and decline any claim. The Contracts of Insurance Act 2024 will introduce proportionate remedies for consumer policies from 15 November 2027, so the consequence fits the mistake. From that date, the outcomes will be as follows.
Deliberate or reckless misrepresentation. If you deliberately lied or recklessly disregarded the truth when answering your insurer's questions, your insurer can treat the policy as if it never existed ("avoid" the contract). This means they can refuse all claims and may not have to refund your premiums. This is the most serious outcome and applies where the policyholder knowingly withheld or falsified information.
Careless misrepresentation. If your non-disclosure was not deliberate but was careless - meaning a reasonable person in your position would have answered differently - the remedy depends on what the insurer would have done had they known the truth. If they would have charged a higher premium, they can reduce the claim payout proportionally. If they would have applied an exclusion, they can apply that exclusion. If they would not have offered cover at all, they can avoid the policy - but they must refund your premiums.
Innocent misrepresentation. If you made an honest mistake and a reasonable person in your position would have answered the same way, the insurer must pay the claim as normal. This will be one of the most important protections under the new Act. Under the current rules, even innocent mistakes can result in a declined claim.
The insurer also has to show that the non-disclosure was relevant to the specific claim - that is, that there is a connection between what was not disclosed and the loss being claimed for. This prevents insurers from using an unrelated non-disclosure as a reason to avoid paying a valid claim.
If your claim is declined or reduced because of alleged non-disclosure, you have the right to challenge that decision. You can use your insurer's internal complaints process and, if that does not resolve it, escalate to the IFSO. For a full guide on challenging a decision, see our guide on how to complain about your insurer.
The duty of disclosure is not a one-way street. Insurers have their own obligations when it comes to disclosure, and these grow when the Contracts of Insurance Act 2024 takes effect on 15 November 2027.
Ask clear, specific questions. From November 2027, for consumer insurance contracts, the insurer will need to ask clear questions about the matters they consider material. Vague or overly broad questions (such as "Is there anything else we should know?") will carry less weight. If the insurer fails to ask about a topic, it will be harder for them to penalise you for not volunteering that information.
Explain the duty of disclosure. Your insurer must tell you about your duty of disclosure before you take out or renew a policy. This usually appears on the application form or in the policy documents. If the insurer did not clearly explain your obligations, that may be a factor in your favour if a dispute arises.
Act proportionately. From November 2027, the insurer's response to non-disclosure must be proportionate to the type of misrepresentation. They cannot simply void every policy where a mistake was made - they must consider whether it was deliberate, careless, or innocent, and apply the appropriate remedy.
Show relevance. The insurer must demonstrate that the non-disclosed information was actually relevant to the risk they were assessing. A blanket refusal to pay a claim because of an unrelated non-disclosure is open to challenge.
The Fair Insurance Code also requires ICNZ member insurers to treat customers fairly and transparently, which includes how they handle disclosure issues. If you believe your insurer has not met their obligations, you can raise this through their complaints process or with the IFSO. For more on the Fair Insurance Code, see our guide to the Fair Insurance Code.
Getting disclosure right is not complicated, but it does require some care and attention. Here are practical steps that may help you avoid common pitfalls and protect your position as a policyholder.
Answer every question fully. Do not skip questions or give vague answers. If a question asks about your claims history in the last five years, list every claim - even the small ones. If it asks about medical conditions, include anything you have been diagnosed with or treated for, even if it seems unrelated to the insurance you are buying.
Do not assume something is not relevant. Let your insurer decide what matters. If in doubt, disclose it. A common mistake is leaving out information because "it was years ago" or "it was only minor." These judgments are for the insurer to make, not you.
Keep copies of your application. Save a copy of every application form, online submission, or phone conversation record. If a dispute arises later about what you did or did not disclose, having a copy of what you submitted is invaluable. Some insurers provide a copy of your application with your policy documents - check for this and keep it.
Update your insurer when things change. If your circumstances change during the policy period - a new driver, a renovation, a change in vehicle use, a new medical diagnosis - check your policy to see whether you need to notify your insurer. When in doubt, tell them.
Ask for clarification if a question is unclear. If you do not understand what an application question is asking, contact the insurer and ask them to explain. Keep a record of the clarification. Under the new rules from November 2027, an ambiguous question may work in your favour - but it is still better to get clarity upfront.
Be honest about past claims and incidents. Insurers share claims data through industry databases. If you fail to disclose a previous claim, there is a good chance they will find out - and discovering the non-disclosure at claim time is the worst possible outcome.
Review your details at renewal. Renewal is another point where your disclosure obligations apply. Check that the information your insurer holds is still accurate and update anything that has changed. Do not just auto-renew without reviewing the details.
For more on your rights during the insurance process, see our guides on your rights as a car insurance policyholder and the Fair Insurance Code explained.
If you are dealing with a disclosure issue - whether you are unsure what to disclose, believe your insurer has unfairly declined a claim based on non-disclosure, or want to correct information on an existing policy - there are several places you can turn to for help in New Zealand.
Your first port of call should be your insurer. If you realise you have made a mistake or omission, contact them to correct it. Most insurers will update your records and adjust terms if needed. It is far better to address a disclosure gap proactively than to discover it at claim time.
If your claim has been declined or your policy affected because of alleged non-disclosure and you believe the decision is unfair, you can use your insurer's internal complaints process. If that does not resolve the issue, the Insurance and Financial Services Ombudsman (IFSO) provides free dispute resolution. The IFSO handles a significant number of non-disclosure complaints each year and is experienced in applying the current disclosure rules, and will apply the Contracts of Insurance Act 2024 once it takes effect in November 2027. See our guide to complaining about your insurer for step-by-step instructions.
The Consumer NZ website has useful articles on insurance disclosure and your rights as a policyholder. The Citizens Advice Bureau can provide free general guidance, and Community Law Centres may be able to help with more complex situations.
For the legislation itself, you can read the Contracts of Insurance Act 2024 on the New Zealand Legislation website. The Act comes into force on 15 November 2027, and the current rules apply until then.
If you are comparing insurance options and want to see how different providers approach things like application questions and cover terms, getting estimates from multiple providers on Compare.org.nz is a good starting point.
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