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Policyholders: Be Careful Not to Misrepresent Yourself on Your Insurance Application

Fri Apr 13th, 2018 on     Insurance Claims,    

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 for which you’re attempting to receive benefits.  For example, if you failed to disclose the history of disability in your family, the insurer might argue that it constitutes a material misrepresentation.  If your disability is not linked to your family medical or disability history, however, and instead resulted from a car accident, then you could argue that even if there was a misrepresentation, it is simply not relevant (e.g. material) to your eligibility for benefits.

Insurance Application May Have Been Ambiguous

In Florida, an insurance company cannot assert the material misrepresentation defense (to defeat a policyholder’s legitimate insurance claims) if the misrepresentation at issue was due to some ambiguity in the insurance application.  Oftentimes, the language in an insurance application is ambiguous and difficult to discern.  For example, a disability insurance application may ask you to list out your history of “disabling conditions,” but may not make it clear what constitutes a “disabling condition” for the purpose of listing.  You might not list out partially disabling conditions due to this ambiguity — if the insurance application is sufficiently ambiguous, you will not be precluded from coverage.

Speak With an Experienced Miami Insurance Litigation Lawyer for Additional Guidance

If your insurer has denied, delayed, terminated, or otherwise interfered with your receipt of benefits, then you may be entitled to challenge the decision of the insurer — even where the insurer claims that their decision is based on a purported misrepresentation in your insurance application.

Here at Ver Ploeg & Lumpkin, our attorneys have decades of experience advocating on behalf of insurance claimants in a range of disputes, including those involving healthcare benefits, disability benefits, property insurance claims, and more.  We believe that personalized legal representation not only leads to better results during the litigation process, but also contributes to the peace-of-mind of our clients — throughout the litigation process, we consider the strategic objectives of our clients and keep them fully apprised of developments in their case.

Call (305) 577-3996 to speak with an experienced Miami insurance litigation lawyer.  During your initial consultation, we will assess your insurance claims and help you take the first steps towards resolution.

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