3. Further to the question above, if a piece of non-disclosed information is not related to a particular claim (e.g. I submit a claim due to an injury from playing football, but I had not previously mentioned my smoking habit), can the insurance company still reject such claim?

Following the answer to Question 2, the legal issues are whether the non-disclosure of the smoking habit was an important non-disclosure during the insurance application, and whether this is a fact that the applicant could have been reasonably expected to disclose?

If your smoking habit was an important fact, (the policy application asked if you smoked) and you did not disclose the fact that you were a smoker, you would have prejudiced the insurance company's position right from the start. Your insurance policy may be voidable (i.e. the insurance company is entitled to terminate the insurance policy and to avoid the contractual liability). Consequently, irrespective of how the claim arose (e.g. due to an accident or a third party's fault) , the insurance company may be entitled to avoid the policy and reject your claim.

From a layman's point of view, a non-disclosed fact may be totally unrelated to the disease or injury the insured person suffers and you may therefore question the rationale of declining a claim based on non-disclosure. In fact, it should be noted that if the non-disclosed information is vital enough to have affected the underwriting decision of the insurance company, it may be legitimate for the company to decline a claim even though the non-disclosed information is not related to the current disease or injury.

The disputes settled by the Insurance Claims Complaints Bureau show that the drinking or smoking habit of the insured person is an important factor in the assessment of the risks in life or health insurance by the insurance company. So, such factors (drinking or smoking habit) should be disclosed in advance.