An insurance contract is an agreement like any other contract concluded between an insurer and an insured and can be described as a contract to reimburse the insured for loss suffered by an uncertain event which has been insured against.
Importantly, the insurer agrees to provide risk cover for a specified but uncertain risk and the insurer undertakes to pay a sum of money to an insured, based on the insurer’s calculation of the possibility of the uncertainty. Where the event has not been specified or the risk calculation compromised by events not disclosed to the insurer, the agreement to provide risk cover is compromised leading to a repudiation of an insured’s claim.
In your situation the non-disclosure of the addition of a thatched lapa to your house, which is typically a fire hazard, and which was not disclosed to your insurance company, has lead to the repudiation of your claim due to such non-disclosure, even though your insurance may have provided for fire damage.
To evaluate whether such repudiation is legal, our courts look at whether the information that was not disclosed to the insurer, is material or would have made a difference in the insurer’s decision to cover you at a specified premium or not. The question is therefore, if the insurer was aware of your thatched lapa addition, would they have entered into the agreement or established the premium at what it is, or would they have made it a requirement that for example firefighting equipment be held nearby. If the answer is that the insurer would probably not have undertaken to cover the risk or not done so without qualification or only done so at a different premium, the repudiation by the insurer will be valid.
In our law, there is a general duty on any insured to prevent damage or risk, and it is therefore always better to be honest with the insurer upfront and also disclose anything that you suspect may increase your risk.
If you feel that you have been unfairly treated by your insurer, you can lodge a complaint with your insurer. If this does not resolve your concerns you can also consider lodging a complaint with the insurance ombudsman or obtaining legal advice from an insurance specialist.