Insurance cover and mental health

Explains how mental health problems can affect insurance cover, what your rights are, and how to choose the right cover for you. Includes a list of specialist insurance providers.

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What are my legal rights regarding insurance?

Do I have to tell my insurance provider about my mental health problem?

It's understandable to wonder if you should disclose (tell an insurance provider about) your mental health problem or not. However, if you don't answer questions about your mental health completely truthfully, and your insurance provider finds out, this could have some serious consequences.

For example:

  • Your policy could be cancelled.
  • Your policy may become void – this would mean that any claim you make would be dismissed, even if it's not related to your mental health problem.
  • You could be charged a lump sum fee to make up the difference between the rate you were paying, and the rate you would have paid if the insurance provider had known about your mental health problem.
  • If a claim has already been settled and the insurer finds out afterwards, they may bring legal proceedings against you to recover the amount they paid out.
  • You may find it harder to get insurance in future.

It doesn't make any difference whether you actively lie to the insurance provider (for example, if the form asks you 'have you ever had a mental health problem?', and you tick a box to say 'no'), or whether you simply fail to tell the whole truth (for example, if you do disclose your mental health problem, but don't tell the insurer important details, meaning they don't have all the information they require to assess your claim).

There's also a chance that any kind of dishonesty could be considered fraudulent under the Fraud Act 2006, and may have criminal law consequences.

So it's generally not a good idea to lie – or conceal the truth – about your mental health history when applying for insurance.

If I tell them, could they treat me differently?

Yes, but only within the law.

The law that protects you from disability discrimination in England and Wales is the Equality Act 2010. This law says that insurance providers can only lawfully treat you differently on the basis of your mental health problem (for example by refusing to cover you or charging you more), if both the following are true:

  1. The insurance provider acts on the basis of information that is both relevant and reliable, AND
  2. What they're doing is reasonable.

(The Equality Act may also protect you from discrimination if you had a disability in the past which you no longer have, and also if the insurance provider believes you have a disability but you haven’t. See our legal pages on disability discrimination for more information.)

What does 'relevant' mean?

Insurance companies make decisions about whether to provide cover, and how much to charge for it, based on their assessment of the risk involved. They need to find out relevant information to help them assess this risk.

For information to be relevant, there must be a connection between your mental health problem and whatever you are buying insurance for.

For example, if you apply for income protection insurance, the insurance provider will assess the risk of you losing your job (and them having to pay out on your claim). Your mental health might be relevant information, because it might affect the likelihood of you becoming unable to work.

If the information that the insurance provider relies on when assessing your application is not relevant, then a decision to deny you cover or to charge you more would be unlawful discrimination.

What does 'reliable' mean?

Insurance providers must base their decisions on information from reliable sources. This could include:

  • statistical data about risk or life expectancy
  • medical research information
  • medical reports.

If the information the insurance company uses is not accurate or reliable – for example if it is out-of-date or from an unreliable source – the decision to refuse you cover or charge you more would be unlawful. Insurance companies sometimes do not tell you clearly about the information they have relied on to make their decisions.

If you have been denied insurance cover, or if the insurance premiums you are being charged seem too high, our page on complaints and legal action explains how you can challenge this.

What does 'reasonable' mean?

As well as basing their decisions on relevant and reliable information, insurance companies must also make decisions that are reasonable.

There isn't any agreed legal definition of 'reasonable' in this context, but these are some examples of unreasonable behaviour:

  • If they charge you a premium that is out of all proportion to the risks your mental health condition presents – this is very likely to be considered unlawful discrimination.
  • If they justify their decisions based on generalisations about mental health conditions rather than information about your specific diagnosis – this is quite likely to be considered unlawful discrimination.
  • If they deny you cover or charge you higher premiums and don't adequately explain their reasons why when asked – this might be considered unlawful discrimination.

Examples of unlawful discrimination by insurance companies:

  • Steffi is 33. She applies for a mortgage protection policy when she is buying a flat. In her teens and early 20s Steffi experienced bulimia (an eating problem) and severe depression. Her mental health problems amounted to a disability under the Equality Act 2010. She received treatment and has now lived for several years in recovery from her eating disorder, and without any severe depressive episodes. The insurance company rejects her application for a policy on the basis of her diagnoses in the past. The company have discriminated against Steffi because of her past disability.
  • Geoff, who has a diagnosis of schizoaffective disorder, is looking to take out home contents insurance. The insurance company asks him whether he has any health problems, and when he discloses his diagnosis it refuses to provide cover. Information about his mental health has no connection with the risk of making a claim under home contents insurance, so the insurance company has unlawfully discriminated against Geoff.
  • Jess has an anxiety disorder which amounts to a disability under the Equality Act 2010. She made two online applications for life insurance with the same provider. Her applications were identical, except that in the first application she didn't declare her mental health problem, but in the second application she did. The quote she got for her second application was 5 times higher than the first quote. When she asked in writing for an explanation, the provider simply responded that “experience suggests that people with mental health problems are a higher claims risk”. This is highly likely to be unlawful discrimination. A five-fold increase is likely to be considered disproportionate to the risks presented by Jess’ mental health problem, and it is likely to be considered unreasonable for the insurance provider to base its decisions on generalisations rather than on Jess’ specific diagnosis.
  • Adina has a diagnosis of bipolar disorder, and she needs to buy car insurance. Based on data relating to the risks posed by a person driving while experiencing mania, the insurance company tells her that she will have to pay double the normal price. However, the data they use is over thirty years old and based on a very small sample, and the study has since been discredited. In this case, it’s not reasonable to rely on this information, so charging a higher premium is unlawful.

Can an insurance provider access my medical records against my wishes?

Insurance providers cannot access your medical records without your consent. However, if you tell them about a mental health problem, the insurance provider will often ask for further information from your doctor. They may also ask you to see an independent doctor that they choose.

In this situation, you have the following rights:

  • The insurance company can only contact your doctor if they have your written consent.
  • You have the right to see a doctor's report about you before it is sent. This is the same whether it is your own GP or other medical practitioner, or an independent doctor that the insurance company have chosen.
  • You can stop a report from your regular GP or other medical practitioner being sent if you are unhappy with it.
  • You can ask your own GP or other medical practitioner to change any part of his or her report if you feel it is inaccurate or misleading. If they are not prepared to make the changes you suggest then you can make a written statement of your views about the parts of the medical report you feel are inaccurate or misleading and this must be attached to the medical report.
  • You can't stop a report being sent if it is from an independent doctor who has never treated you before, even if you disagree with it.

If you refuse to give written consent, refuse to allow your doctor to send their report or refuse to see an independent doctor, an insurance company may decide to refuse to insure you. Unfortunately, this is their legal right and there is nothing you can do about this.

Can they make me give them access to my medical records?

Some insurance companies have been known to ask individuals to make what is called a “subject access request” to access all of their medical records.

But the Information Commissioner considers this an abuse of your data protection rights.

If an insurance company asks you to make a subject access request to obtain all of your medical records:

See our legal pages on your personal information for more information about your rights regarding access to your medical records.

 


This information was published in April 2018 – to be revised in 2021. References are available on request. If you would like to reproduce any of this information see our page on permissions and licensing.


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