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Just the Facts

Its expensive to lie to your insurer

By Barry Zalma | Updated on February 26, 2012

When facts essential to a decision to insure or not insure a particular risk are misrepresented or concealed there is no basis for a contract of insurance and it can be, and should be, rescinded. In Mountain City Ford LLC v. Owners Insurance Co. and Auto-Owners Insurance Co. No. 2009-CA-002233-MR (Ky.App. 09/02/2011), the Kentucky Court of Appeals agreed.

Insurance agents and brokers who place insurance for businesses in which they hold financial interest will find that they are held to the duties of an agent for the insured rather than an agent for the insurer, even if the agent has an effective agency agreement with the insurer allowing it to bind insurance.

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