In many jurisdictions, for an insurer to carry its burden of proving that coverage is void due to a material misrepresentation, the insurer must prove not only that the misrepresented fact was something that the insurer wanted to know, but that the misrepresentation affected the insurer’s investigation. In other words, that the misrepresentation was material. The question often becomes, how is materiality determined?
Continue Reading Jury Permitted to Determine if Misrepresentations by Insured Were Material

In the recent California case, Duarte v. Pacific Specialty Insurance Company, the appellate court examined an insured’s “misrepresentations” when applying for an insurance policy and concluded that the insurer had wrongfully denied coverage.1
Continue Reading When is a Misrepresentation Material for the Purpose of Insurance Coverage in California?

When insurers investigate insurance claims and suspect that something about the claim is not quite right, they often assign special investigation units evaluate whether the claim lacks merit or is otherwise fraudulent. In Young v. Progressive Casualty Insurance Company,1 a federal district court in California recently upheld an insurer’s denial of its insured’s claim for the theft of his motor home based on the policy’s fraud and misrepresentation provisions. The court’s decision was based primarily on the cell phone records of the insured’s son.
Continue Reading Cell Phone Records Support Insurer’s Denial Based on Fraud

Fireworks will literally be exploding outside of my home next to Channelside in Tampa. The video above depicts the view from my master bedroom. So long as those fireworks are blowing up outside of my home and over Tampa Bay, my insurance company has no problem. The question is at what point do fireworks inside the home become an insurance coverage issue.
Continue Reading Fireworks and Explosions–Fourth of July Spectaculars Are Not Liked by Insurance Companies

After a claim is made, and despite the obligation to objectively, fairly, and reasonably investigate a claim with an eye toward providing coverage and without putting the insurance company’s interests ahead of their insured’s, some insurers actively look for ways to deny coverage. One of the ways some insurers do this is by using the claim investigation to search for information that the insured provided in its insurance application that is or was inaccurate.
Continue Reading Insurers Cannot Rely on Rescission if They Fail to Inquire and Investigate Insureds Before Claims

On November 22, 2016, Judge Berle M. Schiller from the District Court for the Eastern District of Pennsylvania issued his Opinion and Order in Payne v. Allstate Insurance Company, granting summary judgment to Allstate and awarding them $25,000 in damages, after finding that the Plaintiff made material misrepresentations while securing the homeowners policy.
Continue Reading Allstate Voids Policy and is Awarded Damages Due to Policyholder Misrepresentations

A recent case out of the 8th Circuit Court of Appeals dealt with material misrepresentations.1 In 2006, an insured’s home was destroyed by fire. He submitted a claim and it was paid, so he rebuilt. State Farm subsequently cancelled his policy. He then went to an independent insurance agency to obtain a new policy. He answered questions posed by an employee and the employee entered the responses into the computer system. He was asked about prior losses and he told the agent about the fire. The agent printed the application and the insured signed it without reading it.

Continue Reading Material Misrepresentations on an Insurance Application and During the Claims Process

A recent Florida case involved insureds whose home was insured by Citizens. On May 25, 2012, the home was damaged by water escaping from a broken plumbing system.1 Citizens’ adjuster inspected the home and noticed that the driveway and interior flooring had been trenched and the underground plumbing system had been removed by a plumbing company. Citizens took a recorded statement from the insureds, and paid them approximately $28,000.

Continue Reading Insureds Recover Attorney Fees and Costs Despite Jury Finding of Misrepresentations or False Statements