Insurers shouldn't discriminate with higher premiums unless the risk profile of a customer is altered by their mental health condition.
For some insurance products, mental health issues won't be relevant, although there are often connected factors such as increased risk of debt problems leading to insurers demanding upfront payments.
Thanks to industry standards published by the Association of British Insurers, customers of over 200 insurers can request companies follow specific guidance on mental health and insurance cover.
How to apply for insurance with a mental health condition
Applying for insurance with a mental health condition usually means disclosing your condition and giving the insurer the full facts about the person they are about to insure.
Even if we believe the mental health condition is irrelevant to the insurance policy, we should still disclose as much information as possible.
We go into more detail about how mental health problems may affect insurance quotes later, but let's first look at what you need to disclose after comparing insurance quotes and making an application.
Many insurance policies will ask about whether the applicant has pre-existing medical conditions.
For many people, thinking about pre-existing health conditions generally relates to physical health, but it's important to understand that disclosing mental health conditions is expected too.
Conditions that should be disclosed include:
- Eating disorders
- Post-natal depression
This isn't an exhaustive list, just a set of examples drawn from the guidance on the Association of British Insurers (ABI) website.
If something could be considered a mental health issue, it should be disclosed in the same way you would disclose a physical health issue when asked.
Insurance applicants with a diagnosed mental health condition may need to supply evidence from their GP or other health professional.
This evidence could include details of:
- Date of diagnosis
- Method of treatment and past methods
- Symptoms and dates of last symptoms
- Details of previous hospitalisations
- Details of time off work due to the condition
- Doctor's details
Bear in mind that all insurers in the UK are bound by data privacy laws. While sharing this information can feel intensely personal, it must be kept private by law.
Pay attention to the specific questions asked during the application process. Some providers may just want customers to list recent conditions or may only request conditions that have caused severe illness or hospitalisation.
As we've mentioned, disclosing mental health conditions is an expected element of applying for insurance in many cases. If there's a question about it on the form, we usually need to answer it.
If we fail to disclose something, it can be used as a reason to void the policy later. In other words, if we don't disclose something, we could lose out on an insurance pay out when we need to claim.
Even so, there are some cases where we may not feel our mental health conditions are at all relevant. We look at this in more detail in relation to home insurance below.
Finally, if one insurer is asking uncomfortable and potentially irrelevant questions, it might be worth checking to see if a different provider will be more accommodating.
Do mental health conditions affect insurance quotes?
Mental health conditions can sometimes impact the quotes an insurance company offers us or dictates whether they will cover us at all.
While mental health conditions may be more relevant to some types of insurance products than others, we may still run into issues when trying to insure our car, for example,
Understanding the potential challenges that we face and the rights we have can help us apply for insurance with more confidence.
If you have a mental health problem now or a history of mental health issues, you may run into the following difficulties while applying for insurance:
- You might be assessed as a high risk customer - this could lead to cover being refused or higher premiums
- Insurer questions may not be useful - i.e. they could simply ask whether you have ever had a mental health problem and then use that simple answer to either decline cover or increase premiums
- The application process could be difficult if you find it difficult to concentrate on forms or speak on the phone
- If you're declined or charged higher premiums, some insurance providers won't offer an adequate explanation
Fortunately, the Mental Health and Insurance Standards provided by the Association of British Insurers (ABI) go some way to combatting these problems - there's more detail on those towards the end of this guide.
Mental health and insurance rights
Under the Equality Act 2010, it's unlawful for insurers to discriminate against anyone because they have a disability unless it makes them a greater risk for insurance cover.
Mental health problems aren't always categorised as a disability, but the Equality Act defines them as one when it has a lasting impact on a person's day-to-day life.
In some cases, mental illness simply won't be part of the insurer's questions - your mental health condition isn't likely to be relevant to your pet insurance application, for example.
However, if the question is asked and you lie or fail to disclose the extent of any mental health problems during the application, the insurance policy could later be invalidated or you could be charged a lump sum to cover any increase in premiums as a result of taking the mental health condition into account.
Some insurers do specialise in providing insurance to those with mental health problems, so those are an option if you don't get the cover you need from regular insurers.
If the quotes you're receiving seem abnormally high and you've disclosed a mental health condition, it is definitely worth seeking out a specialist quote.
Motor insurance and mental health
Motor insurance is compulsory for anyone owning or driving a motor vehicle, and some mental health conditions can impact premiums if insurers believe they increase a customer's risk of having or causing an accident.
In most cases, though, as long as a doctor has confirmed there are no problems with concentration, agitation or suicidal thoughts, the DVLA will not need to be informed.
One crucial thing to remember: if you fail to disclose a significant mental health condition to the DVLA, your driving licence may be invalid. If the licence is deemed invalid, then so is any insurance taken out relating to it.
However, the following rules also apply:
- If the DVLA is aware of the condition and has issued a licence, insurers cannot refuse coverage, raise premiums or increase the excess on a policy without evidence that a customer is an increased risk.
- Insurers can ask questions about a mental health control and request a copy of a customer's driving licence or a letter from the DVLA confirming they are able to drive.
- If insurers decide to increase a customer's premiums due to increased risk, they must provide a valid reason for doing so.
Taken together, these rules protect both customers and insurance companies.
Find out what to do if you have a car accident and you're unsure how to make a claim.
Home insurance and mental health
Home insurance is generally one of those insurance products where the mental health of a customer is irrelevant - having a mental health condition doesn't make our home more likely to be burgled, for example.
If an insurer asks questions related to mental health when signing up for home insurance, it's worth asking why the insurer believes the question is relevant.
That isn't to say a customer shouldn't consider their mental health issues when calculating how much contents insurance and out-of-home cover they need.
For instance, if a person's mental health condition means they're distracted and stressed while out of the house, checking they are covered for theft while away from home could be a good addition to a policy.
Although home insurers shouldn't discriminate against people with mental health problems, it's worth pausing and looking at some of the reasons why a person's mental health difficulties could still impact their home insurance premiums.
A report from the Money and Mental Health Policy Institute (MMHPI) in March 2019 found people with mental health problems were three and a half times more likely to be in problem debt.
This could impact a person's insurance options if they struggle to pass a credit check because of a poor payment history. Insurers may demand upfront payment in full as a condition for agreeing to cover - while this isn't discrimination, it can be frustrating to customers who can't afford those upfront costs, so we can try and maximise our chances of acceptance by taking steps to repair credit ratings.
We've also got more information on mental health and debt if this is an issue.
Tips for getting insurance when you've got a mental health condition
The first step to finding insurance, whether you have a mental health condition or not, is to compare the best insurance deals for your circumstances.
Once you have a list of general quotes, click through to the ones that seem to best suit your needs and go through the application process.
At this point, though, it's worth checking whether the insurer is one of the 200+ who are members of the ABI (see below) as those companies have all committed to standards surrounding insurance and mental health.
Here are some further tips:
- Insurers who ask detailed questions rather than short ones are more likely to make an informed decision with a reasoned explanation
- Don't agree to an excess that's too high to lower premiums - even if it lowers monthly payments, it might be stressful to pay a high excess later if you need to make a claim
- Be honest in all answers to ensure your insurance isn't later invalidated
The more information the insurance company has, the more likely they will come to a reasoned decision about your application.
For some people, their mental health problems make actually applying for insurance difficult. If this is the case, you have the right to request reasonable adjustments at this stage.
These could include:
- Letting you apply by letter instead of online or over the phone
- Extending deadlines to allow more time to fill in forms or read the small print of an insurance policy
- Allowing an advocate to act as an intermediary to help you set up the policy
If an insurance company doesn't allow for any reasonable adjustments and doesn't respond to reasonable questions about mental health problems, steer clear and look elsewhere - there are plenty of insurers to choose from.
The Association of British Insurers (ABI) has a set of Mental Health and Insurance Standards they expect members to follow.
These standards cover accessibility, the application process, communicating decisions, and transparency. It's worth looking at each of the sections in turn to understand what we should expect when we contact insurers.
On improving accessibility, ABI members should:
- Give customers two or more choices of how to communicate with them - this is particularly important for customers who have concerns about talking over the phone
- Implement processes to support customers needing assistance with their application
- Implement training and promoting staff awareness - so, staff should know the basics of understanding mental health problems, they should show compassion, and they should use appropriate language
Insurers should ensure their application process includes appropriate questions, along with:
- An introduction to their underwriting questions to manage customer expectations - this includes explaining the process, highlighting how important it is to accurately answer the questions, and explaining why certain questions are asked
- Only asking questions that can be answered without prior medical knowledge or understanding
- Only asking questions relevant to mental health conditions and treatments that are linked to the severity of a condition, plus multiple conditions of widely differing severity should not be crammed into one question
On this last point, it should mean that different mental health conditions aren't conflated into the same question, nor should a mild version of a condition be conflated with a more serious condition.
When communicating cover decisions to customers, insurers should be clear and empathetic, as well as:
- Making any exclusions due to mental health conditions highly prominent in policy documents and all relevant communications
- If applicants request an explanation via their preferred communication method, this should be provided
- If appropriate, customers should be signposted to relevant support services
- Formalised and negative language should be replaced with neutral and non-technical wording in communications
- Regularly reviewing written and verbal communications about underwriting decisions (these should be supported by a relevant mental health charity, professional or group)
These standards help customers understand why their cover has been set at a particular level or denied entirely. Knowing our rights around why our risk profiles might be affected by mental health conditions can help us decide whether these explanations are legitimate or not.
Finally, the ABI highlights how transparent their members must be. They should:
- Ensure their underwriting approach around mental health conditions is regularly reviewed - so, it must include up-to-date and relevant data
- On request from customers, explain what evidence was used to inform their decision and state when it was last reviewed
Ultimately, these standards should protect most insurance customers, although making sure they're met could result in some unnecessary stress.
It's worth knowing about the ABI Mental Health and Insurance Standards to quote at any insurance company that doesn't seem to be playing by the rules.
The ABI has over 200 members from across the insurance industry, including most of the big names you'll encounter when you compare insurance quotes.
FCA vulnerability guidance
It's also worth being aware of the statutory guidance brought in by the Financial Conduct Authority (FCA) in February 2021.
This guidance is designed to help financial companies communicate more appropriately with vulnerable customers and help them make the right choices. Customers with mental health problems could fall into this category.
Mental health and disability is mentioned specifically as a characteristic of vulnerability, but the FCA also point out that characteristics of vulnerability overlap and can worsen a person's situation.
Other characteristics in the FCA's list that could apply to those with mental health issues include:
- Income shock
- Relationship breakdown
- Domestic abuse (including economic control)
- Caring responsibilities
- Low emotional resilience
While many people will rightly believe these have no bearing on their ability to seek out insurance, the fact that overlapping factors should be considered by companies dealing with applicants in the financial section is important to be aware of.
It means firms are expected to treat customers fairly and with respect at every stage of the process. If that doesn't happen, it's worth considering a complaint direct to the firm and then escalating the case to the Financial Ombudsman Service if you're unhappy with the outcome.
Summary: Be open and honest
Successfully obtaining insurance cover can be made trickier by mental health problems, but there are plenty of insurers willing to offer cover as long as we're honest and clear about any issues we have.
Under the Equality Act, insurers can't reasonably increase premiums unless a person's mental health condition changes their risk profile, so it's always worth challenging (through an online webchat if that's easier) to ask how they have come to a decision, especially if the quote you're offered is much more than quotes found before confirming to the insurer you have a mental health condition.
Choosing an insurer registered with the ABI gives you another weapon in your arsenal - remind the insurer of their commitment under the Mental Health and Insurance Standards and demand fair treatment.
Finally, remember that mental illness and debt often go hand-in-hand, so make sure you can meet the financial obligations of the policy and keep your credit record looking healthy if at all possible.