A misrepresentation would be considered fraud if it is intentional and material. Fraud would be grounds for voiding the contract. If an insurance company receives an application with some information missing or inaccurate for whatever reason and issues the policy anyway, the insurer can later VOID OR RESCIND the said policy, contract and/or agreement.
Any person who willfully makes a false statement or misrepresentation of a material fact for the purpose of obtaining or denying any benefit or payment or assisting another to obtain or deny any benefit or payment can be charged with a felony.
A material misrepresentation may occur when an application contains false information, or it may include the withholding of information. With a liability or property and casualty policy, intent to deceive is not always necessary to void or deny a claim.
Representations are the statements made by the prospective insured on the insurance application. Many of these representations are responses to questions to determine whether the applicant is insurable and how much should be charged.
Under the terms of a homeowners’ insurance policy and applicable Florida law, any misrepresentation, even an innocent one, made by the prospective insured on the policy application may serve as a basis for voiding the policy. The subject insurer or insurance carrier need not prove that the insured made the misrepresentation with an intent to deceive.
Florida Statute § 627.409(1), provides, in pertinent part:
“[A] misrepresentation, omission, concealment of fact, or incorrect statement [made by or on behalf of an insured in an application for an insurance policy] may prevent recovery under the contract to a 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 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.”
Under Florida law, the general rule is that a misrepresentation or omission in a policy application need not be intentional before recovery may be denied pursuant to Section 627.409, above.
The issue with many cases is a material misrepresentation may be found where the applicant did not name all of their household members when taking out an insurance policy. Consequently, when a Florida resident does that, it may save them money on the front end, but it can hurt them on the back end when a claim is made, especially in the event that they are involved in an accident or an incident occurs and the insurance company does their investigation and they find out that there are household members living on the applicable property who live with the applicant/insured and said applicant or prospective insured did not name them probably for the purpose of saving money on the premium. Accordingly, the insured is spending money and ultimately getting nothing in return at a time of need.
It is always recommended an insurance applicant be completely honest, thorough, accurate and forthright with the insurance companies, because when an accident or allegedly covered incident arises, insurance coverage may not be present or available. The amount of money that the insurance company would potentially pay out on one’s claim far exceeds whatever a person would be saving on the front end concerning the premium.
If you have any additional Questions regarding the foregoing or have any legal issue or concern, please contact the law firm of CASERTA & SPIRITI in Miami Lakes, Florida.