To establish its right to rescind an insurance policy, "an insurer must demonstrate that the insured made a material misrepresentation," and to establish materiality as a matter of law, "the insurer must present documentation concerning its underwriting practice . . . which show that it would not have issued the same policy if the correct information had been disclosed in the application." (Credit: Olivier Le Moal/Shutterstock.com)
A number of years ago, a couple purchased a three-story house in New York City's Queens borough that contained three separate dwelling units, each with its own kitchen, bathroom and separate entrance. Thereafter, the couple applied for and obtained a fire insurance policy from Otsego Mutual Fire Insurance Co., indicating on their application that the house was a two-family dwelling. After the house was damaged by fire, Otsego rescinded its policy on the ground that the couple had made a material misrepresentation of fact by stating on their insurance application that the house was a two-family dwelling.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
