What Does Material Misrepresentation Mean?

Material misrepresentation has to do with omissions, incorrect statements, or concealments made on an application that would have made a difference in the terms of your policy. It’s not a question of whether your claim is accurate or not; it’s about your initial application for car insurance. 

There are a number of examples of the types of misrepresentation that could lead to a denial. If you failed to disclose previous accidents, other drivers in the household who might use your vehicle, or how you use your vehicle – for instance if you use it for delivery or courier services but didn’t inform the insurance company of that – the insurance company could decide that they would have denied coverage, required certain coverage, or charged you a different amount of money if they’d know. 

They could also decide the facts you omitted are relevant to your current claim. In either case, this can lead to a denial. That doesn’t have to be the end of it, though, and a good personal injury attorney can help you get your claim covered in many cases.

Is Any Misrepresentation Sufficient to Deny a Claim?

Not every misrepresentation is grounds for denial. One of the things the insurance company will need to show if they deny your claim is whether the omitted fact is relevant to the current claim. 

For instance, if you failed to notify them of a partner or child older than 14 in the house, whether or not they have a license, then you have omitted information they ask for – but if that person wasn’t driving at the time of the accident that you file a claim for, that information isn’t relevant and doesn’t constitute a reason to deny your claim. 

Another thing to keep in mind is insurers are not allowed to actively search for reasons to deny your claims. They have to have a reason for looking into a specific misrepresentation. They also have to notify you immediately, void coverage, and return premiums paid from the time of the discovery if they find an omission. They’re not allowed to sit on the knowledge of a misrepresentation, collect premiums, and then deny coverage only when you make a claim later.

How Do I Defend Myself When I’m Accused of Material Misrepresentation?

Being accused of material misrepresentation by the insurance company that you’re counting on to make you whole after a car accident is upsetting, but you don’t have to just accept their conclusion. 

It’s not unheard of for insurance companies to act in bad faith by doing things like denying a claim even though the omission they’re citing is irrelevant to the loss in question or covering up their knowledge of a misrepresentation until a claim is made. Even if they are acting in good faith and believe they have grounds to deny your claim, there are strategies your personal injury attorney can use to dispute that. 

One strategy is to argue that it was an accidental omission. In many cases, the application forms for car insurance are completed not by you, but by an agent of the insurance company or by a broker. If the person filling out the forms was working on behalf of the insurance company, and if they failed to note or incorrectly noted something you said during the process, the insurance company would not be able to deny your claim for that reason. 

Additionally, if the insurance form was unclear, the insurer may also not be able to deny your claim because your answer was incorrect. A question about drivers in the household may be phrased in a way that makes you think “only list the people I allow to drive my car”, while the insurance company actually wanted you to list “anyone who could drive your car”. This misunderstanding could lead you to leave out an unlicensed teen or a partner who has their own car and insurance. If that’s the case, they may not be able to deny your claim.

Conclusion

Coming out on top against an insurance company is a tough job for an individual, but with a personal injury attorney by your side, you can navigate the challenges. Your attorney can help you understand what the insurer is claiming to be misrepresented, help you determine whether it’s a misrepresentation that can be used to deny your claim, and develop a strategy to get your claim covered.

Source

• https://content.naic.org/sites/default/files/inline-files/JIR-ZA-34-03-EL.pdf

"The information provided herein is simply a brief overview of the Florida law on this particular matter. It should not be relied upon for legal purposes, as the facts and circumstances to any specific legal matter may vary substantially from the limited explanation and application of often complicated legal rules and principles that may be addressed herein, or applicable in your particular legal matter. You should only rely upon legal advice provided to you by a licensed attorney who has had an opportunity to fully evaluate your particular legal matter".