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The Effect Of Material Misrepresentations When Applying For Auto Insurance

Age, gender, and income level are just a few of the factors that go into determining a person’s auto insurance rates. On average, young men pay more for car insurance than do similarly situated young women. Because there are many factors that lead the insurance company to cover a person and issue a policy, it is important for the insurance company to have accurate information on the insured. When the insured lies or omits important information, this can affect both the policy premiums as well as the chances of having a policy paid out when needed.

When Can A Material Misrepresentation Lead To A Cancelled Policy?

Determining what constitutes a material misrepresentation can be difficult in the aftermath of an accident. In some cases, after an accident, an insurance company might look over the policy looking for reasons to void it. If there are any misrepresentations or omissions, the insurance company might argue that it might never have issued the policy had the truth been known. Under Florida law, a misrepresentation or omission can only prevent an insured’s recovery in the event of an accident if any of the following apply:

  • The misrepresentation, omission, or statement is fraudulent or material to the risk assumed by the insurer in issuing the policy; or
  • Had the insurance company known the true facts as part of a policy or other requirement, it would not in good faith have issued the policy, or issued it in the amount it did with the misrepresentation, or covered a particular hazard.

There are different ways in which an insurance company can try to use misrepresentation to deny coverage. For example, if a person fails to list all family members living in his household when the insurance application asks for this information, the insurance company may argue that this is a material misrepresentation. However, it is more likely that under Florida law, the coverage would only be denied if an unlisted family member causes the accident, and not if the primary insured does.

A misrepresentation that may be considered material may include: not listing young drivers who may be driving the car to be insured, failing to disclose prior accidents, or listing a false home address in a different area in order to gain lower premiums. These misrepresentations may be considered material because they would clearly have affected whether the insurance company would have issued the policy, and would affect the amount of premiums charged.

Retroaction Policy Cancellation

Note that a Florida court has held that the ability of an insurance company to retroactively withdraw coverage extends to legally required no-fault insurance, despite notice requirements on cancellation of policies. It is therefore important for a person filling out an insurance application to be truthful in providing information to avoid discovering he does not have insurance coverage when he needs it most.

Contact A Fort Lauderdale Personal Injury Attorney

If you have suffered an injury as a result of another person’s negligence or in a car accident, you need an experienced personal injury attorney handling your case and dealing with insurance companies on your behalf. Before you decide that you do not need to seek compensation for your injuries, contact a Fort Lauderdale personal injury attorney at Boone & Davis for a free consultation today.

Boone & Davis, Attorneys at Law is located in Fort Lauderdale, Florida and serves clients in and around Hollywood, Fort Lauderdale, Dania, Pompano Beach, Deerfield Beach and Broward County.

© 2014 - 2017 Boone & Davis, Attorneys at Law. All rights reserved.

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