Can a carrier decline coverage due to incorrect information on a company application that was signed by the insured? How much weight does an application carry?

California Subscriber

Yes, a company can decline coverage and void the policy for incorrect information. Most applications state this just above the signature, that if the insured materially misrepresented a piece of information that the carrier relied on to grant coverage and the carrier discovers it at the time of loss or after the policy is bound, they can void the policy. Material misrepresentation is the failure to disclose a fact that would change the carrier’s mind about issuing a policy. For example, the insured fails to mention that he has a mean Rottweiler with a history of biting people unprovoked. Most carriers would deny an application if they knew that risk existed on a homeowners policy. Or, if a manufacturing plant manufactured fireworks along with paper plates and omitted information about the fireworks manufacturing, that information is reason to void the policy upon discovery.