Policyholders: Be Careful Not to Misrepresent Yourself on Your Insurance Application
In some cases, your insurer may deny your claim due to a specific misrepresentation in your insurance application — even if the misrepresentation at issue was not intentional and was merely a mistake borne of a simple misunderstanding. Material Misrepresentation as a Defense Insurers can use a material misrepresentation defense to avoid having to pay out for your legitimate insurance claims. Oftentimes, an insurer will discover some mistake in your application and will anchor their arguments on it. For example, if you fill out a disability insurance application and write down your family history of disability (and other health conditions) incorrectly due to a lack of information, the insurer may argue that this mistake constitutes a material misrepresentation. If you’ve had your claim denied or delayed (or otherwise handled in an unfavorable manner) due to a purported “material misrepresentation,” then you may feel as though you don’t have many options. In reality, however, policyholders can utilize a number of different arguments to overcome this defense. Not all Misrepresentations Preclude Insurance Coverage The mere fact that you made a mistake — or even intentionally misrepresented something on your insurance application — is not enough to preclude insurance coverage. According to Florida Statutes section 627,409(1), a misrepresentation, omission, or mistake will only prevent the insurance claimant from recovering damages if the insurer would not have issued the policy in the first place (given the misrepresentation at-issue). Further, your insurer cannot preclude coverage unless the particular misrepresentation is causally linked to the loss […]