A new law that was introduced last week will bar insurers from rejecting claims when customers fail to declare vital information that they had not been asked for.
Until the law was changed, some insurers refused to pay out if they discovered that a customer had not told them about something that may not even have been relevant to the claim, such as a GP visit.
From 6 April, however, the onus is on the insurers to ask clear questions, not rely on customers to give them information they may or may not require and applies regardless of whichever method the customer uses to buy insurance, such as a comparison website.
Customers will still be required to answer the questions put to them honestly and accurately but if they make an honest mistake, they will still be paid if they claim, or at least partly. However insurers will still be within their rights to turn down claims where any information has been deliberately withheld.
The rules should give consumers greater protection, if applied correctly, unless they deliberately mislead insurers or are careless in what information is provided.
MoneySavingExpert.com creator Martin Lewis was among industry figures who signed a letter in 2010 calling for the Government to implement Law Commission proposals to loosen the rules on what consumers must declare.
His website gives the example of a woman with leukemia who was not paid out on a critical illness claim because she had not told her insurer about a completely unconnected ear infection.
The Association of British Insurers (ABI) said that many insurers already take the approach outlined by the new rules but is happy that the loopholes used by a few will be closed.
An ABI spokesman said that it wants customers to be able to take out insurance policies with the confidence that they are covered.