Insurance companies use the “material misrepresentation defense” to try to deny claims by finding errors or omissions in the insurance application. For example, if a parent says their 15-year-old doesn’t drive, but the insurance application doesn’t list them as a driver, the insurance company might deny any claims related to the child. However, there are ways to fight this defense. Not all mistakes on the application are enough to deny coverage, and sometimes the insurance company’s own errors can work in the policyholder’s favor. If someone lies or doesn’t tell the truth on their insurance application, they might not be able to get coverage for a claim related to that lie. But the lie doesn’t affect coverage for other unrelated claims. For example, if someone didn’t mention that their son lives with them and then their son gets into a car accident, the insurance might not cover that. But if the claim has nothing to do with the son, the insurance should still cover it. If someone lies on their insurance application, the insurance company might not have to pay for a claim. But if the insurance agent made a mistake on the application instead of the person buying the insurance, the insurance company might still have to pay. The key is to show that the insurance agent was working for the insurance company when they filled out the application. In the insurance world, if an insurance company gives supplies like forms and stationery to a person who sells their insurance, that person is considered to be working for the company. This means that the company is responsible for anything that person does, just like if the company had hired them directly. There was a court case called Straw v. Associated Doctors Health & Life, where the court decided that an insurance company is responsible for the actions of the person selling their insurance, unless the person buying the insurance knew or was told that the seller didn’t have full authority to act on behalf of the company. To figure out if an insurance company is responsible for the actions of an insurance representative, the insurance company has to show that the representative works for them. This can be done by asking the insurance company for documents and getting the representative to answer questions. It’s also important to show that the representative gets paid by the insurance company for selling their policies and has the authority to sell those policies. In Florida, if an insurance agent fills out an application incorrectly or ambiguously, the insurance company can’t deny a claim based on those mistakes. This means that if the application is unclear or if the agent makes a mistake, the insurance company can’t use that as an excuse to deny coverage. So, if you’re ever in a situation where the insurance company is trying to deny your claim because of something on the application, it’s important to know your rights and fight back. These are some court cases and a lawyer’s information. The lawyer writes about insurance law and thanks someone for helping with the article. The article is submitted on behalf of a group called the Trial Lawyers Section. They have a mission to teach their members about duty and service, improve how justice is served, and advance the study of law.
Source: https://www.floridabar.org/the-florida-bar-journal/strategies-for-defeating-the-material-misrepresentation-defense-in-insurance-actions-a-plaintiffs-perspective/
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