Often, when a property insurance claim is reported (even one undisputedly covered) one of the first things many carriers will do is review the application for the policy to see if the insured answered questions either incorrectly or incompletely. This is because Section 627.409 of the Florida Statute allows insurers, in certain limited circumstances, to rescind the policy and prevent the insured from recovering under the contract altogether because of that statement or omission. The relevant provision of the statute states:

Representations in applications; warranties.—

(1) . . . A misrepresentation, omission, concealment of fact, or incorrect statement may prevent recovery under the contract or policy only if any of the following apply:

(a) The misrepresentation, omission, concealment, or statement is fraudulent or is material either to the acceptance of the risk or to the hazard assumed by the insurer.

(b) If the true facts had been known to the insurer pursuant to a policy requirement or other requirement, the insurer in good faith would not have issued the policy or contract, would not have issued it at the same premium rate, would not have issued a policy or contract in as large an amount, or would not have provided coverage with respect to the hazard resulting in the loss.

Continue Reading Rescission Of Coverage When Misrepresentation In Policy Application Is Not Material To Acceptance Of Risk

In Georgia, an insurance company does not have to prove fraud in order to prevent recovery under a policy; the standard is actually much lower for insurance companies. A carrier can prevent recovery by showing a policyholder has misrepresented, omitted, concealed, or made an incorrect statement about a material fact when buying insurance.1

Continue Reading Insurance Agent had Imputed Knowledge – Allegations of Misrepresentation Fail

Five tips to make sure your insurance coverage is not voided:

  1. When you are shopping for insurance coverage be sure to carefully read the underwriting section of the application.
  2. Don’t assume your insurance agent has filled out the correct information for personal questions, including your financial background and prior insurance.
  3. Don’t assume your insurance agent has filled out the correct information for questions asking about fences, trampolines, diving boards, dogs, etc.
  4. Accurately and honestly answer these “underwriting questions.”
  5. If your insurance company says they will only offer coverage to you if you remove a liability to your property, they mean it.

Continue Reading 5 tips to make sure your insurance coverage is not voided.

The information in an application for insurance is extremely important; it contains information which the insurance company uses to determine if it will extend coverage, what type and how much coverage, and is used to determine the level of risk. The accuracy of that information is important. There are different burdens of proof that an insurance company must meet if they intend to void a policy based on a misrepresentation in the application. The different standards may depend on what the language in the policy and application says and whether the insurer is an admitted carrier or a surplus lines insurer, as well as the law in your jurisdiction.

Continue Reading The Information In Your Insurance Application Is Extremely Important

One of the trickiest parts of property insurance claims is the contents portion of the claims. Even if the insured saved receipts to prove the age and cost of personal property,those receipts are often stored in the same general place as the personal property and suffer the same fate as the personal property. Accordingly, policy holders and public adjusters are often left to estimate age and costs of personal property. This often leads to a great deal of litigation between policyholders and their insurance carrier.

Continue Reading Misrepresentation of Personal Property Claims Can Cost….BIG

Insurance applications are important in the insurance marketplace. Applications are part of the risk analysis insurers make in determining whether they will issue a policy. There is exhaustive case law on issues of misrepresentations, ambiguities, and incomplete applications. The issue I want to discuss is whether an insurer can waive its right to deny a claim based on an application misrepresentation.

Continue Reading In North Carolina, the Insurer Can Waive Its Right to Claim Forfeiture

Last month, the Florida Senate Appropriations Committee unanimously passed Senate Bill 708. If the bill becomes law, part of the language would curb Universal Property Insurance Company, and all insurance companies in the state, from alleging certain application misrepresentations.

Currently, Florida residential property insurance companies have 90 days to perform underwriting on an insurance risk – the specific dwelling and insured it is offering insurance coverage for – but what happens during the 90 day period seems to vary greatly depending on the insurance company.

Continue Reading Universal Property Insurance Company’s Go-To Reason for Denying Claims May Come to an End

You don’t have to have a law degree or be an insurance guru to see through one of the recent arguments People’s Trust has been using when denying insurance claims. Buying insurance with People’s Trust is very different than the way insurance is purchased with other Florida carriers. The basic process is different because People’s Trust doesn’t require policyholders to fill out or sign an application for insurance but then argues that the homeowner lied on the “insurance application” and the coverage is void! When an insurance company alleges someone has lied on an application, the insurance company should be required to produce the form with that insured’s signature, but People’s Trust has had no written application to produce for these “verbal sales call” policies.

Continue Reading Another Outrageous Insurance Claim Denial by People’s Trust Insurance Company, Part II

I have often written about how the specific words matter in insurance policies during coverage evaluations. Well this simple motto also carries over to the application, which is often the first document submitted by a policyholder to an insurance carrier to obtain a policy. If the language of the application and policy is drafted by the insurance carrier and it is not clear, it will be construed in favor of the policyholder and coverage. A recent Eleventh Circuit Court of Appeals decision based on Florida law demonstrates this as it relates to an application and alleged misrepresentations in the application by a policyholder.1

Continue Reading “Best Of Knowledge And Belief” Language Of Application Requires

In North Carolina, when an insurance carrier alleges that a policy should be voided because of an application misrepresentation, the allegation is that an insured made a representation that is false and material, and the policy may be voided even if the statement was not fraudulent.1

Continue Reading Carolina Coverage: Can an Innocent Mistake Void your Insurance Policy in North Carolina